The Miami stock exchange (MIAX) has their matching engines colocated in Equinix's NY4 data center in Secaucus NJ, much like many other exchanges. I would not be surprised if TXSE does the same.
Many trading firms already have their trading engines in that data center and I would assume TXSE would want quick access to that order flow and this might be easier if they are in NY4.
Of course, they may want to have their colo facilities in TX in their own data center, that way they can rent out space and make some extra revenue, but then they'd have to build that out.
> I would assume TXSE would want quick access to that order flow
Perhaps Texas could use a different trading model that doesn't require ultra high speed trading.
Matt Levine often mulls the idea of a system with a trading window that doesn't let the fastest connection to the order book win. Perhaps an order book that works at human speeds so humans can trade too (I can think of a few ways to do it - but would need modelling to try and figure what actually works). He points out that most trades are done in the last hour, so really trading only needs to occur once a day.
The issue is whether a market trading system can be designed with suitable restrictions that beats the current market design (for listed companies and for traders).
Designing markets is hard because you have to assume every player is selfish and only cooperates where it is to their benefit and will defect or cheat if the incentives of the market encourage that (Enron in the California energy markets).
Unlikely since SEC would need to approve of a different system of market trade incentives.
Edit: Personally I would like to see an exchange that was more international. I'm from New Zealand and our good businesses often list on the Australian exchange rather than the NZSX. The system of ADRs for other countries feels like a massive hack.
Reg NMS’s Order Protection Rule (Rule 611) says you can’t trade through protected NBBO quotes, outside a few narrow exceptions. That’s the letter of the law.
The practical effect isn’t just a bit of latency. It rewires incentives. With 611 in place, the question for latency-sensitive firms becomes: what HFT tactics can I run that are 611-compatible? Without 611, the question would be: what HFT tactics actually add value for my counterparties? That’s a very different optimization.
For firms on direct feeds (often building their own synthetic NBBO), 611 doesn’t add much information. The constraint is compliance, not discovery.
Because NBBO is size-agnostic and top-of-book, anchoring execution to it lets micro-lot quotes steer outcomes. You can influence the protected price with tiny displayed size. That’s great for gamesmanship, bad for displayed depth, size-sensitive pricing, and near-touch discovery.
Also: if two informed counterparties want to trade away from the protected price to reflect size or information, 611 mostly blocks that outside limited carve-outs. We lose mutually beneficial, size-aware prints to satisfy a benchmark that ignores size.
On settlement, the uniform benchmark helps in calm markets. But it’s naïve to think that holds through a real black swan. In stress, timestamp ambiguities and fragmented data make “what was executable” contestable, and disputes spike regardless of quote protection.
In a sound market structure, the clearer (CCP or clearing broker) should carry and underwrite that tail risk—margin, default funds, capital, and enforceable rulebooks. Instead, 611 shifts accountability onto quote-protection mechanics, insulating clearers from responsibility and, perversely, amplifying systemic risk when the system most needs well-capitalized risk absorbers.
There is no reason why shares should be bought on sold in time frames far too short for anything to have meaningfully changed about the companies or market conditions.
This is the free market speaking. If there was one exchange there would be ~no~ less latency arbitrage. But there are many... Which creates a competitive landscape and reduces fees for investors. The by product is you have many HFTs that come in to take advantage of mispricings, even if they are on sub millisecond scales. It doesn't harm the company or the investor. Its quite the opposite... Investors benefit from competition amongst exchanges and HFTs.
In addition you have redundancy in the markets system. Exchanges are important for national security... Having everything centralized would risk people's retirements, savings, and more
One other aspect of HFT that is good for the general investor is that HFT injects liquidity, making it easier for a general investor to liquidate their position, which is a desirable thing for human traders. HFT does not magically make human investors engage in more or less speculative behavior.
HFT is an easy thing to attack, but I've never encountered a lucid argument for why it's bad. "It's not fair that I'm not as fast" isn't really a reason unless you explain why removing liquidity (i.e., making it harder for you to find a buyer at your price point), paired with you moving up the "trading swiftness" rankings, is preferable.
the common argument against it is that it guarantees a technological arms race and by those conditions pushes the smaller groups out of the competition.
it's unfair in the same vein that the rich are always offered better loan rates than the poor. Yeah, it's obvious why that would be, but it's not fair either.
although imo pushing small-backer arbitrage out of the equation is a good thing.
What HFT arbitrage does is rapidly push markets with different prices into alignment with each other. If you banned HFT but kept multiple markets, the inevitable result would be markets with bigger differences in prices for longer.
The only kind of trading that really good HFT trading pushes out is other slower less efficient arbitrage traders, but why should we want more worse arbitrage traders if the result is markets being more out of sync?
What's important economically is that traders that trade based on fundamentals can do so efficiently across multiple markets. Efficient HFT arbitrage trading helps that, it doesn't hinder it.
> the common argument against it is that it guarantees a technological arms race and by those conditions pushes the smaller groups out of the competition.
But a cursory examination of history would reveal that the literal opposite has happened.
The issue isn't that there's a lot of change coming from inside the markets, it's that there's a lot of change coming from outside the market, and it's all interconnected.
The behavior of other participants is itself a first-class signal.
Rule 611 compresses that signal. By forcing everything to orbit a size-agnostic NBBO, it collapses a lot of the “behavioral bandwidth” (depth, imbalance, sweep patterns, replenishment, cancel/replace cadence) into a single top-of-book tick. Less resolution, less information.
High-resolution flow tells you who wants what, at what size, and how urgently. When we gate execution through protected quotes, we encourage tactics that flick the top-of-book with tiny size and discourage truthful size revelation. That’s signal destruction dressed up as protection.
Letting informed counterparties print away from the protected price (to reflect size or information) increases informational content. You get cleaner read-through from actual willingness to trade, instead of a compliance-driven dance around a fragile benchmark.
So yes: other people’s actions are the best data feed. The more of that behavior we can see—in size, time, and venue—the better our discovery gets. 611 reduces that visibility by design.
If HFT was genuinely good for the entire market than absolute latency would be what matters but it is only relative latency between HFT firms that matter because they are all competing against each other using the same tactics where whoever is fastest wins.
All participants contribute to price discovery. A nanosecond order book helps with price discovery the deeper it is, regardless of whether orders clear.
> The better the computers hooked directly into the exchange get you mean.
I think you're trolling with this one. But you had an advantage typing your comment into a web browser compared to all the people who wrote theirs on paper and put it in an envelope with a stamp.
A nanosecond order book helps with price discovery the deeper it is, regardless of whether orders clear.
This is a claim, it is not being backed up by evidence.
I think you're trolling with this one. But you had an advantage typing your comment into a web browser compared to all the people who wrote theirs on paper and put it in an envelope with a stamp.
This analogy doesn't make any sense. Why would a person care about nanosecond price discovery? The only benefit is for whoever controls the computers that are able to do it and profit off of it.
If that's not true then why are these firms paying so much money to have nanosecond advantages?
Why do people doing normal trading want to avoid the exchanges that have HFT computers skimming money off their trades?
There is no mutual benefit here. If there was you would be able to explain it clearly and with evidence instead of just making claims about 'price discovery'.
The price is going to get discovered either way just as it has for hundreds of years, it happening a billion times per second does normal traders no good.
> Why do people doing normal trading want to avoid the exchanges that have HFT computers skimming money off their trades?
What's "normal trading"? A prop desk at an investment bank? A hedge fund? A pension fund? Someone who's just installed Robin Hood on their phone?
Most rational participants want lower trading costs and overheads, smaller spreads etc. HFT provides that - the evidence being "look at what the spreads are today, compared with what they were pre computerised trading".
> The price is going to get discovered either way just as it has for hundreds of years, it happening a billion times per second does normal traders no good.
Could you explain how a market participant who makes one trade a day is negatively impacted by high resolution price discovery?
> Could you explain how a market participant who makes one trade a day is negatively impacted by high resolution price discovery?
They’re negatively impacted because the SNR drops when the gain is turned up and causes algorithmic ringing to perturb the price that would be generated by high quality signal.
People who extract money by injecting algorithmic ringing into financial markets are a social parasite.
> The better the computers hooked directly into the exchange get you mean.
I need you to understand that HFT makes decisions based on human-defined parameters. It's not AI-driven. What's the difference between a human saying "these are my parameters, now CPU, go trade based off those" versus "these are my parameters, now underling, go trade based off those"
the only difference is speed, plus i suppose those underlings might suck at following their boss's directives compared to a computer
> The better the computers hooked directly into the exchange get you mean.
This implies a distinction between "our" (i.e., humans) and "the computers." Can you explain what distinction you meant if it wasn't AI? After all, everything computers do outside AI is done pursuant to knowable, describable human control, no different from pressing keys on a keyboard.
So if you didn't mean AI, I think it's worse for your argument, not better.
The difference is that I will actually explain what I mean instead of just making claims with no evidence.
Can you explain what distinction you meant
The distinction is that the computers making millions of trades per second are owned by few people and have a huge advantage. They don't lose money and they don't hold anything.
They aren't wanted by actual people making decisions, they are there in spite of what traders buying stocks to own them actually want. They are there because they make money and from the exchange and make money for the exchange.
Retail traders are the product even though they don't want to be.
It's pretty funny that there are people in this thread pretending like "price discovery" is a real thing that happens in markets based on information. We've all seen Dogecoin and BBBYQ. The emperor has no clothes.
We could make the distinction between price discovery, i.e. what price are people currently willing to buy and sell at (short-term) vs value discovery (long-term).
When I press the buy and sell button, I want the transaction to happen as quickly as possible. So does everyone else.
My millionth of a second is different than yours, and everyone else’s.
It is no different than buying or selling anything else. And there is no loss from the additional liquidity, you can easily set a limit at which you want to buy or sell.
The only way to implement this is to eliminate competition between exchanges.
There are two different things being talked about here.
Trading based on arbitrage between exchanges will happen in one way or another no matter what.
Trading millions of times per second automatically on the same exchange when some people have low latency computers at the exchange with huge amounts of extra information is not necessary.
Also, Wall Street would love this. The more of the order book you submitted, the more information you have about its composition.
The point isn't to make something 'wall street hates' it's to make something that doesn't get money eaten away by automated computers in the middle so that it's the best option for people making trading decisions on people time scales.
> The point isn't to make something 'wall street hates' it's to make something that doesn't get money eaten away by automated computers in the middle so that it's the best option for people making trading decisions on people time scales.
Why is this desirable? It seems like an argument designed only to serve the interests of a small class of person who insists on doing manual trades themselves.
The rest of what you've written just sounds like "I lost money because computers are better than me at the task." I'm not sympathetic to that concern. Computers are better than me at lots of things, so I just don't try to compete at those things. I pay people with access to the computers to do them for me, and then I focus on the things I'm good at instead. Division of labor and all that.
Anyone who isn't involved in HFT should be in favor of rules that slow down trades to human time scales. HFT currently favors a small class of rich people.
> Anyone who isn't involved in HFT should be in favor of rules that slow down trades to human time scales
What are you basing this on?
I’m a former algorithmic market maker. Every plan to “slow down trades to human time scales” I’ve seen were trivially gameable. They were always proposed by a group of concerned citizens, and then jumped on by my bosses, because if the market is slowed down to pre-HFT speeds, Wall Street can make pre-HFT profits on risk-free trading again.
Do you think the internet would work better if we forcibly increased latency? If we did, if the argument were this would flatten the market and better let small websites compete with CDNs, do you think that would actually happen? Google and Cloudflare would say “oh well,” and disassemble their servers?
Our markets have structural problems. They are mostly solvable. HFT is none of them, which is why you keep hearing about it from folks who don’t want reform.
> "How does HFT provide social benefit to the world at large?"
It's explained multiple times in this very discussion. It's not our fault if you refuse to read them. But the most straightforward and obvious way is that it injects liquidity into the market, making it easier to sell when you need to liquidate. (It also reduces volatility overall, another good thing.)
> > the exchanges weren't established for the abstract sake of money, they were established to provide benefit to people.
Snort. The exchanges were established by wealthy people, for wealthy people, to engage in business with other wealthy people.
The NYSE was established in 1792. Is it your contention that anyone except the elites were buying and selling stocks in 1792? Let alone all the exchanges that pre-date the NYSE. The Amsterdam Stock Exchange was set up in the 1600s specifically to facilitate the buying and selling of Dutch East India Company shares. Was Farmer Aardhuis buying shares? Or aristocrats and royalty?
I suspect the root argument is really against the efficacy of markets and capitalism as a useful system for humanity, in which case I say that is a fair debate. The benefits are hardly obvious today.
Retail investors railing against HFTs are sort of like those San Francisco types who protest new development to the benefit of their landlords.
It's nothing like that since there isn't a limited resource and everyone has access to the core purpose, which is to trade stocks.
What I notice with these discussions is that no one can actually explain why a retail investor or anyone would want computers trading underneath them millions of times a second.
At best they try to give hft credit for the automation that happened with computers anyway.
The only people that want it are the people doing it. That's not a business, that's a grift.
> not me. I don't mind if it takes like 20 seconds or so
Which is fine! You can probably find a broker who will give you fee-free trading with that preference. The price you execute at won’t be as good. But unless you’re trading millions, that’s probably fine.
Do you only want us to get our news once daily via a physically printed and distributed newspaper? That’s the timeframe that we used to use for news updates. If not (I.e., you’re in favor of keeping the Internet), how would you reconcile the asymmetry between trading and news updates? If there is a disparity between these timescales, you end up with markets gapping hugely every time they open. This just increases risk and volatility. Yes, markets do this overnight today, but 24-hour markets don’t do this as much and they allow a trader to set stop orders that are active overnight to protect positions. So, for instance, futures markets will gap over a weekend break, but because they trade 23 hours per day during the week, they are much more smooth than they would otherwise be. Compare gaps in ES SPX futures contracts vs. gaps in the SPX itself, for instance. In general, smoother is better for everyone.
Humans do still manually trade. The existence of HFTs doesn't prevent or interfere with that, in fact it makes it easier by ensuring that prices are more likely to be converged to a consensus market price at any given millisecond.
Thinks of it like this. When I put in a trade at human speeds based on business fundamentals, I'm not looking that the millisecond by millisecond prices, I just put in a price I am willing to accept and if the market reaches that price I get execution. HFT makes that easier and more efficient across markets by ensuring prices are converged rapidly.
How do you think it makes it harder or worse? If I put in an order to buy at $x on a particular market because I think the stock is worth more than that for business reasons, what is it about the existence of HFT that is a problem for me?
Disagree? You think milliseconds is “better” somehow?
Then by that logic microseconds are better still! (A straight-faced argument made by thousands of HFT people.)
Then, surely, nanoseconds matter. Again, some traders care deeply about shaving single digit “nanos” off their response times by using smart NICs that can respond before the incoming packet has even finished arriving! Bypassing the CPU entirely because ermahgerd that would waste precious nanos!
Okay, what about femtoseconds? Attoseconds? Low single digit Plank time units?
Clearly the extrapolation is nonsense.
The problem is that there’s always an advantage to some rent-seeker to be faster than everyone else, so there will never be consensus between them and the general public. Or each other.
It’s a classic tragedy of the commons.
This is why laws are required, to prevent that one greedy guy putting “just one more cow” onto the pasture than the other greedy guys.
This is the “speculation is bad” take with a side of naïveté about how markets work.
Open an order book. Prices and quantities aren’t decoration; they’re live telemetry for supply, demand, and how tight the crowd’s consensus is at each level. That’s information, full stop.
A human (or machine) trader forms a view of fair value against that tape. The book helps decide how to trade—size, urgency, venue—regardless of motive: arbitrage, hedge, speculation, investment, cash-out. Intent doesn’t change the math.
Prints are messages. Every execution updates everyone else’s priors. More prints → more information → smoother discovery.
Make the book sparse—only a handful of trades per day—and watch confidence collapse. With weaker consensus and wider error bars, people step back. Liquidity thins, friction rises. That’s not morality; that’s microstructure.
Time horizon doesn’t invalidate the signal. A strategy that unfolds over days and one that resolves in milliseconds both add to the dataset. If it trades, it teaches. More resolution in others’ behavior means better prices and deeper books. That’s the game.
Millisecond trading strategies have zero relationship to information about companies or economic fundamentals and are therfore not economically productive. They're exploiting microstructure inefficiencies like latency arbitrage, order front-running, not price discovery. That's not 'teaching' the market it's a tax on everyone else's execution. The fact that it's legal doesn't make it structurally useful. It is just a result of the rules not being updated when trading became automated at superhuman speeds
> Millisecond trading strategies have zero relationship to information about companies or economic fundamentals and are therfore not economically productive
It is not clear to me that the only economically productive information is "information about companies or economic fundamentals."
If I know some idiot is willing to pay 100x what a company is actually worth, that is economically productive because it gives me, someone better with money, a ton of resources that formerly were controlled by someone who didn't know how to leverage the assets in an economically productive manner. IT's the same argument as allowing adverse possession: transfer of assets from non-productive owners to productive owners, benefiting society as a whole.
With this, I've established a third kind of data beyond "economic fundamentals" and "information about companies."
Right. “Worth” and “price” are relative notions that are only useful when paired with a point of view. What’s your house “worth?” You might have a number in your head, but unless you have a buyer willing to transact at that price, your house isn’t worth what you think it is. And this relates to economically productive information. Your house might also be worth more if one knows that there is gold or oil buried underneath. It might make more economic sense to bulldoze the house and start mining or drilling.
The boundary is "arbitrary", but clearly there has to be one, otherwise we're all nodding in agreement as trading speed heads inexorably towards Plank time units.
We have some convenient "lines in the sand" that we can use as a guide:
- To make trading fair globally, the round-trip time for light around the planet could be multiplied a couple of times. That's about a second.
- The fastest possible time a human can parse the meaning of a long headline (not the full news article!) is... about a second.
- Nobody in their right mind should be buying any significant volume of shares without double-checking their order. There's no way to do this even vaguely carefully in under... a second.
Etc...
Bots trading faster than a second are trading with each other, and the only signals they have are each other.
Humans are what markets are for, not bots.
This reminds me of a story from WWII where a bunch of generals took a holiday at the same time, leaving a junior general in charge. He was in a bit of a panic because he was expecting to be overloaded with work... but found it easy. The generals were making work for each other by requesting reports, organising meetings with each other, etc...
Bots make work for bots, they generate signals for bots ever faster, to be processed by faster bots still, etc...
It's just... nonsense. Zero real information is being generated, they're just "riffing" off of the much less frequent human-initiated trades, all of which take minutes to organise and execute with due diligence.
It's like being asked to write a 10-page essay on a three-line poem.
And you keep incessantly posting about the moral evils of speculation which is only tangentially related to the Texas Stock Exchange. I guess morality policing makes your comments better?
The only non-arbitrary boundary is the one set by physics. Everything else is arbitrary. There are ways to greatly reduce front-running of orders, but that actually is an orthogonal issue to HFT and microstructure level trading.
hah someone finally said it. The financial market or whatever the f it's called has become a Monty Python sketch. Like those "pro" StarCraft gamers that keep randomly clicking their mouse for no reason except to keep their APM counter high.
It's exhausting to see good reasons offered and then y'all proudly failing to understand those reasons. Like, there are literally multiple comments here explaining it.
If I have a condition that is resolved by standing upside down on my head, and I invent a 100 ways to balance my body on my head and explain the reasons for each of them, it doesn't mean that standing on my head is a good or sensible thing to do. And none of them address the core problem that is the condition that requires me to stand on my head.
Look at why shares and the stock market were created in the place, and how many layers we laid on top of them and made the means the end and the purpose. If it takes you more than 2-3 sentences to explain something that's purely invented by humans it was probably silly to begin with.
Like the other day I was just watching a video about UTF-8. It spent a good chunk explaining all its various quirks and rules and workaround that all went back to how ASCII was dumb in some of its choices in the first place and now we're stuck with that forever.
heh I thought of that while writing the comment, but I think I covered it with "something that's purely invented by humans" which finance definitely is, unlike medicine, surgery, physics, and to a lesser degree, computing.
Except for the fact that people don’t know what the price is even with all available knowledge. HFTs serve a pretty useful function in converging to a discovered price the market can bear continuously. Prior to HFT markets were generally less stable on their pricing and liquidity was much worse. The fact you can basically trade at any time on anything instantly is made possible by HFT.
I look at them as providing a service like an energy exchange does in ensuring power distributes evenly and regularly across a region across providers and grids. They clip a fee in the middle but they provide a service in stable supply and prices.
This doesn’t mean automation isn’t without risk, and like an energy exchange, when things go badly they can go very badly. But by and large you never notice either the HFT or the energy exchange while you benefit from their existence.
> He points out that most trades are done in the last hour, so really trading only needs to occur once a day.
Presumably then the last trader has the most information, and so the game would be getting the info as late as possible and trading as late as possible, but not too late.
That's one thing that will make blockchain trading interesting as it's discreet block by block, such as the ex-dividend date who holds a stock when the dividends are paid, might make fees for that block very competitive. The SEC is really struggling now with good regulation but it's coming end of the year to draw the line in the sand.
> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading.
What would that look like? Periodic auctions? Certainly it could be done, I'm just trying to understand what problem might be solved, and whether the solution would be effective.
For example, even with the opening and closing auctions we have today, there can be an advantage to getting your order accepted right before the deadline. Some participants do this, most don't really (depending on the exact definition of "right before"). But the fact that some do tells me that some participants would do the same thing with periodic auctions, and at least for them latency would still be important.
If, as seems likely, latency is fundamentally important to at least some styles of trading, how do you incentivize participants to not value it?
You take bids continuously but publish the bids and "resolve" the auction every X seconds, where X is between 5 and 10. Then there is no speed advantage as long as you can get your bid in within 5 seconds.
There is still a speed advantage. You can look at correlated markets for example and trade at the end of the time window with 5 seconds more info than anyone trading at the start of the time window.
Except with the randomness you won't know if the window is 5 seconds or 10 or anything in between. So sure you could send in your bit at 4.99 seconds but it won't matter if you're a few microseconds off.
I suspect that randomness of some sort is the only way. Without that, whatever the rules of the game, there is a way to somehow get a slim advantage. You can make the advantage small and the costs to try to gain it large, such that it isn’t cost effective to try, but as we’ve seen with HFT, it’s amazing how much people will spend to pick up pennies. Even a tiny gain, exploited frequently enough can be quite profitable.
A Poison process. Just specify the expected value. E.g., if the expected value is 5 seconds and have gone some hours without an event, then the expected time is still 5 seconds.
E.g., like the time to some radio active delay and whatever its expected value to decay is.
Or even a fixed delay. Imagine trading with one month delay - You'd have to bid what you think the stock is actually worth, not what you think everyone else will think it's worth in five milliseconds. That's extreme, of course.
Eric Ries first started talking about a Long-Term Stock Exchange, he suggested long (potentially multi-year) lock-up periods. The LTSE he actually implemented doesn't have that. I speculate that this was a compromised because they are allowing dual listings which helps them gain market share but also would undermine the entire concept of very long lock-ups.
You could force companies to provide standing orders to sell unlimited shares at a price selected when they go public, and one they're unlikely to go below.
This would happily also eliminate price speculation entirely. The price would just be whatever the price is and most returns would come from dividends. Would require a bunch of tax and regulatory changes
> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading
Wall Street (as in the sell side) is strongly incentivised to stamp out high-speed trading. It undercuts their dealer model. They have tried and failed to come up with an auction model that eliminates HFT without tradeoffs that real investors find unacceptable.
I'd say IEX has done remarkably well - it's not likely to displace NASDAQ or NYSE but it has solidified its place as the #3 US exchange by any reasonable measure. If TXSE achieves comparable market share I'd call that a wild success.
You're not wrong to say that most participants don't care about what IEX offers, but enough do to make a meaningful dent in trading volume.
IEX is "3rd place" in their mind only because the other 12 exchanges are owned by two companies. IEX is 13/13 for volume, and the main reason they have any volume is because IEX sometimes has the NBBO so you have to trade there per reg NMS.
You're right, my view is way out of date. I didn't realize CBOE had grown so much in straight equities trading. IEX is the best of the rest, but it's NYSE, NASDAQ and (to my surprise) CBOE as the clear top 3.
That’s what always surprises me when folks bring this up. Nobody in the market cares. Institutional investor experience some of the lowest trading cost in history. These complaints are most often coming from retail traders where again I don’t follow the argument. Instead of some guy on the floor picking up dollars with have machines picking up pennies. This is a win for everyone.
Nobody in the market cares because everyone in the market are cheaters. There is a huge untapped potential of people outside the current market that do not participate because they know the market is rigged against them.
A fair market could be huge, but the trick is keeping it fair. It used to be more fair, and we used to have a healthier economy because of it.
It’s not like most of the unfairness in the current market couldn’t be dealt with, probably with laws already on the books. Most HFT strategies are not only blatantly dishonest but also clearly illegal. The government looks the other way though, because corruption.
Where is the citation for this 100% HFT? Lots of numbers floating around but the only time I have seen those types of numbers are for short lived periods.
My issue as always with these numbers is that back in the day you had some bloke on the floor vacuuming up this wide spreads and today we have some of the smallest spreads in history. It has a cost but that cost is generally less than what you were paying before.
Why would you create arbitrage opportunities for no reason? That’s the only thing that would happen I can see from an exchange that can’t keep up with the NBBO price, which you are obligated by law to quote regardless.
People in the finance industry will arb between digital and human markets and net a profit from it. It seems pointless to me, but perhaps I’m not fully grasping what that would do.
Also it just changes the nature of the game. There's no incentive to interact with the batch until the absolute last microsecond. It will still be dominated by latency-sensitive participants, just in a manner where the difference between visible liquidity and latent liquidity is even more diverged from reality (on average).
Bit of an aside, but I really do not understand the concerns with trading speed.
I can trade at human speed now: when I want to make a trade, I put in the order and it gets executed. Speed elsewhere in the market makes it easier, not harder, for me to trade when I want to. And I don’t care who my counterparty is; that’s a fundamental feature of a stock exchange. If A is always faster than B because A is 2 racks closer to my broker in the data center… so what? How does that hurt me? Good for A.
A computer-powered trading strategy can react faster than me to news—true. But that’s fine because I don’t have to follow a breaking-news investing strategy. There are tons of others, many of which have proven to work very well.
Because lit orders get front run. Every sophisticated participant/algo is exceptionally efficient at extracting money from less sophisticated participants.
As someone who trades decent volume but doesn't have a fully institutional grade workflow, I have the fortune of dealing with this...
Simple lit orders (posting an order directly to an exchange) will be taking advantage of by both market makers, by HFTs, and by smarter execution algorithms. The algorithms running the bids and asks will widen spreads. Sell orders will peg to one cent below your ask, and if flows start to reverse, they will pull their liquidity and the slower participants get their liquidity swept through (adverse selection).
The next step up is to use something like a midpoint algorithm or hidden order, but hidden orders will be pinged with one share from the robots and you will get sniffed out and positioned against. If they detect size in a midpoint algorithm, the liquidity in the opposite direction will evaporate, and they will "walk" the dumb midpoint algorithm down, take the liquidity, and then reset the mid back to where it was. The list goes on. It's generally an awful environment for "regular" participants.
Moving on from simple improvements available to the more advanced retail space like midpoint algorithms and VWAP algorithms, you have algo routes that are explicitly designed to take advantage of the "lesser" order types. If they are in a position to get a fair fill, they will rest the order in case they see a situation they can take advantage of, and only take mid fill if the outlook deteriorates (this is all millisecond time frame stuff, but the orders will be worked in an automated fashion throughout the day - time frame is configurable).
On the more developed institutional side, liquidity is sourced in dark venues designed to ward off HFTs and front-running, or sourced in fair flash-auctions which are again designed to ward off hfts and information leakage from the auction spawner.
So the argument would be that perhaps the modern developments like batched flash auctions should just be the new baseline, and designed so that all of the participants feeding into them get an equivalent quality of fill.
These "phenomena" are fairly significant. Let's say you have a 100k position in a smaller cap stock. You may move the stock down a few percent if you start walking down your order and it becomes clear that you are looking to take liquidity. Vs 100k in one of the more advanced order routes where you're basically going to get filled near mid. And of course it goes without saying that 100k won't even move the needle in the institutional routes.
For a while I got so sick of it that if I was looking to buy back my short options (the same things happen in the option space, but with more slippage), I would stuff a basic midpoint algorithm on the underlying, it would be sniffed out and liquidity would evaporate, price would fall, and I'd slam the ask to buy/cover my short calls on the price drop. At least I could get a fair fill when I played two different areas of the market complex against each other... It's just a pain. To the average participant, they will find that liquidity is there when it suits the counterparty, yet not there when they need it.
NBBO/best bid offer itself can be illusory. There are many situations where if you sweep the bid, you will get a fair fill, but I'd you just hit the bid price, you will essentially take off the very small front order of an iceberg order, they will run their calculations, and the liquidity pegs a cent below you if it suits them. That's how it works.
This goes for all areas of the financial market, including the bond market itself, and it contributes to systemic fragility in addition to harvesting retail money.
Granted, almost no retail participant is actually shipping orders directly to exchanges like I laid out. They are going to payment for order flow routes. These are actually fairly efficient, but again, remember that if you are posting a bid or ask, exchanges pay you (yes, you actually net money, albeit small) to post these orders, and anyone feeding into PFOF routes is getting this income taken from them. The frontrunning risk in the payment for order flow routes is also much more severe, since your order is getting blasted out in all directions before it is posted. So when those sorts of routes go wrong for retail traders (ex making the mistake of posting a large order during a major market event), they're could catastrophically get screwed.
It's also worth noting that retail does have access to a relatively Fair auction system though. Open and closing auctions are probably the best ways to fill orders. Just be careful not to ship too much size into them since a large enough net imbalance (say in a small cap stock) in a closing auction will have the same "walk down the price" effect that happens with midpoint orders.
Personally I think that the institutional flash auctions are pretty neat. For my understanding this sort of liquidity sourcing is growing. I would think that this sort of functionality could be regulated and integrated into the base level market venues.
> lit orders get front run. Every sophisticated participant/algo is exceptionally efficient at extracting money from less sophisticated participants
Anyone executing via lit orders is either forced to do so or an idiot. That’s why most of the market doesn’t execute via lit orders. Which is fine. The trade is still reported ex post facto, and the inefficiencies this creates are always less than the convoluted auction formats one must use to make low latency non-advantageous.
On net I'd agree, with the caveat that the hyper speed liquidity comes at the cost of fragility. Liquidity that can disappear in a microsecond can and does amplify market shocks.
As for retail execution, while on net there's a standard and strong argument that a less regulated market is the most efficient, retail execution is most definitely at the bottom of the totem pole, with an order shopped around to parties that can pick and choose the profitable orders before it is sent to wider liquidity pools. I think that this side of the debate is more about evening out the playing field. On net the market may get less efficient, while slower speed participants have an improved experience. These aren't contradictory.
> while slower speed participants have an improved experience
Wall Street lobbies to ban HFT every few years, hoping people who don’t like how it looks will back them up.
Slower participants in equities are block traders. Folks moving hundreds of millions if not billions at a time. Large institutional investors. Dealers. Retail, on the other hand, would get hosed, though it would also become much more profitable to execute, so maybe that brings some service perks for larger retail traders.
I gotta say.. I'm way out of my depth on that one. As a guy who's mostly put some 401K $$ into index funds, and has the odd RSU/ESPP stock to sell - will any of these be an issue when I sell some of them later? I've only sold ESPP stock via "at this price" when I had a large enough number, and "at market" when not - but it's been in the hundreds of shares at most. May have a few thousand shares of my current employer's stock to sell next year - will this affect me?
No, it will not affect you. The above post is mostly correct, but it's misleading because it's from the perspective of a trader trying to make short term profits. But most of us are considered investors, we periodically buy/sell low volume of liquid ETF/funds/stocks and hold our positions for years. Market makers do collect a tiny premium for every trade, but it's irrelevant for the time horizon that investors are concerned with.
Since this is hackernews, I'd imagine there are a decent amount of people with low float tech stocks. Those things can be impressively squirrely. I've moved a billion dollar company 5% with a $100,000 order by being a klutz.
Granted, these situations are usually in times of market stress, but these are times when for better or for worse people do need to raise personal cash on occasion.
It depends on how thinly traded the stock is. Unless it's very thinly traded or you trade it after hours you'll almost certainly be completely fine. Like if you're talking about something heavily traded like a FAANG, you could probably dump several thousand shares pretty much any time during regular trading hours and have little or no effect on the price. Certainly not enough to be worth caring about for a one time transaction. OTOH if you're running some trading algo that does that kind of transaction thousands of times a day (or more) every day, then that would be a very different story.
Yes, it may! Assuming you are talking about at least a mid five figure position in a non MAG7 class sized stock, if you post the order directly to an exchange, that's enough to shuffle around the level 2 order book (obviously not in your favor).
By doing so you have completely identified yourself as non- informed, slow human flow. Ex: if you are looking to sell, it's blindingly obvious that the next likely move from you will be to lower the asking price. Even human traders will be a able to take advantage of that situation as a bread and butter trade.
One important aspect is that a lot of this is in terms of opportunity cost and risk. If you are posting the order at a "bad" time (let's say market makers are not long inventory and looking for liquidity), that's when one should expect front-running style action, as they want liquidity ahead of you. Likewise, if you're hanging out there and a market blip in the sector or in the depths of the market complex moves against you, you will get filled and "miss out" on the higher price that the price will settle at. And while you may think they don't care about a 50k order, these robots are hyper optimized and will have had PhDs and 9 figure plus data and infrastructure costs explicitly designed to capture every cent. That's why it's so obnoxious... It's not just market makers either. I know of a prop shop trade that involves harvesting rebates on trending stocks (stuffing the ask and amplifying the trend while receiving credits... if you've looked at stock charts you may have seen a seesaw pattern of liquidity exploration), and if you step into an active trade like that no doubt there will be at least some basic conditional logic to take advantage of stale liquidity.
I walk my very non-tech mother through manual executions on occasion. She finds it very funny that I can see her order, and without prompting has commented about how annoying the little game is.
Numbers - Let's say it's a 50 dollar stock that doesn't get a ton of volume. Most stocks are surprisingly illiquid. Which makes sense because of course nobody wants to deal with HFTs. The lit order book is almost a reference price for the actual trading that happens behind the scenes (midfills at dark venues, etc). Wouldn't surprise me at all to see 10 cents of additional slippage. That's $100. Also wouldn't shock me to see more if it's a smaller stock. Of course it's also fairly common for there to be midpoint liquidity right there for you to take. It just depends on the positioning of each of the participants, and a retail trader is at a distinct information disadvantage.
That said, it's highly unlikely that your 401k is at a DMA (direct market access) broker. Your order is probably first going to go to an internalizer (crossed with other customers), and then flashed to prop firms who will have the ability to take your order (and if they do it probably technically means that you've missed some money somewhere, although it may be in any number of obscure areas), and finally you're going to get sent to the market and pools of liquidity via a decent execution engine. On net, these routes don't work out that badly for retail participants.
Also, if you're talking a highly liquid ETF like S&P or Qs, don't worry about it. Just hit the bid.
That said, I would recommend upgrading if you can. Use a midpoint order type, split your order into chunks, spread it out time-wise a bit. Market On Open and Market On Close order types are also widely available at better retail brokers. I think that these are the most fair fills you can get. Split it 50/50 between open and closing auction. It's just a drop-down order type selector, and you can queue for the auction when you set up the order (say, early morning before the day starts) and walk away for the day and come back to filled orders.
Don't use market orders outside of the huge indexes and megacaps. You're guaranteed a bad fill, and then you also run the tiny risk of a truly awful fill (if something happens machine speed before you can blink... been there done that).
Market On Close / Market On Open orders are really easy to use. Brokers like Schwab and Fidelity and interactive brokers will support them. More people should use them. You'll be getting fair fills side by side with smart money.
Thanks. It sounds you are talking about mostly market-rate sell orders? I tend to use limit type orders to sell at a price I'm happy with. Usually right near what the stock is currently hovering around. I.e. if it's hovering between $50 and $51, I'll put in a limit order for $50.85 and hopefully get someone to take it. Sure, I might have been able to get $50.95, but I might have also gotten $50.25 with a market-rate order. Am I doing it wrong?
Theoretically, when the market offers me an order book and I take offers on one or the other side that should be totally fair? I think until execution/fill the information should be totally between me and the exchange and no one else, right? I get that if I send a limit order that can not be filled, that that affects the market because new information is introduced (before the trade) but in the previously described case all the information going out should be after the trade already happened, right?
Sure, if you want to cross the spread you can usually get a clean fill in exchange for a bit more cost. That said, a fair price is fairly synonymous with a midpoint fill, and if you have a proper execution route you can get the ask (smart algo peg orders for example).
There is a caveat though, which is that top-of-book liquidity is increasingly thin every year. It doesn't take that much size to hit the bid, take out the first thin onion layer of liquidity, and have the spread widen away from you. If you look at the live order book depth you will see that the top of book is often thin and flittering. The deeper liquidity will react to the top levels getting cleared before you can blink. (That's why if you have a non-small order and want the bid price, sweep the bid and go a few cents under, you will get a much more reliable fill and won't be left hanging with the liquidity instantly repositioned a sub-penny below you).
I'm generally of the view that the more freedom in trading the better, but there is a concern on these ultra-high-speed trades that it ultimately prioritizes only certain blessed traders, those with expensive equipment, geographical proximity, and approved partnerships.
I've thought that one fairly neutral fix would be to add a random delay to the execution time of each trade. It could be very small... like between 0 to 1 seconds. Just enough to negate the 'all or nothing' prioritizing of a slightly faster connection.
I suppose you could but the problem is that the liquidity would be either shit or more charitably very different to other exchanges that already do what they're supposed to do.
> Just make all positions irrevocable for at least 10 seconds after posting
Sounds great for Wall Street. Spreads would necessarily widen as people buffer out. Meanwhile, you’ve turned every lit order into a 10-second option for market participants. Which means there is still a latency advantage to lifting or hitting a standing order first.
only if you make those bids visible. the bids are held in a buffer and at the end of the buffer, it either completes a trade or appears on the order book. iirc some market tried to do this with a literal loop with a physical latency.
> only if you make those bids visible. the bids are held in a buffer and at the end of the buffer
Everyone else's bids are invisible. The ones you submit--for your self and for your customers--are not. The larger a brokerage operation you run, the more of an edge you get under this system.
We created the unified tape and passed Rule NMS specifically to remove these incentives.
One interesting approach to this is the gas auction system in DeFi where (on Ethereum) traders bid to have their trades included first in a block, and that additional payment is burned / accretive to ETH holders. Though that turns "fastest connection" into "highest bidder" advantage.
Another approach that Aztec and some others are taking is to shield all transactions with zkSNARKs such that the intent of a transaction isn't known until it's completed. Combined with deterministic block times you could force random ordering of transactions in batches, effectively mitigating the fastest connection OR highest bidder advantage.
The real question is whether we even need stock exchange organizations if we can do it all on chain without them. I think the only thing you really need is someone to handle the stock ownership credentials in the event that legal action require involuntary transfers, that sort of thing. That could be a much smaller footprint organization, I think.
That's the promise of tokenized securities! Securitize + BlackRock are trying to make that happen. This should remove a lot of middlemen to the trading and settlement process.
> TXSE’s primary matching engine is located in Equinix NY6 in Secaucus, NJ, with latency equalization across NY4, NY5, and NY6. Customers outside these buildings will experience additional latency. The disaster recovery (DR) matching engine is hosted in Equinix DA11 in Dallas, TX.
> Customers may connect to DR either directly to DA11 or through TXSE infrastructure at 350 E. Cermak in Chicago. Cermak connections will have traffic backhauled to DA11 over redundant TXSE circuits. Backhaul from Cermak to the production data center is not available.
If anything they will build a backup DC in Texas so they can hold that over NJ in case the local government starts talking about transaction taxes again. The CME is currently building a “backup” private Google Cloud datacenter in Dallas.
I would rather see an exchange that requires buyers to hold their shares for at least x days or weeks, and slow everything way down so that people are actually forced to make decisions based on fundamentals rather than trading based on jitters in market movement. Then the datacenter location is almost irrelevant.
You can construct a synthetic long or short position with options [0], so those would need to be removed as well. Options are much too useful for market participants (market makers in particular), so your idea is dead in the water.
[0] For US equity options, if you sell a put and simultaneously buy a call at the same strike price, you have a synthetic long that acts like owning 100 shares of the underlying asset (no dividends, but that’s already priced in to the options).
Buy a put and simultaneously sell a call at the same strike price and you have a synthetic short that acts like being short 100 shares of the underlying asset.
The proposal is because I don't think a bunch of people playing games with money provide any sort of value. If you could only buy a valuable company in such a way that options and HFT trades were excluded, then you would just have to invest in the company and support its growth. That is the goal of the structure. I completely agree with you: If the bloodsuckers don't have to do so, they never will. I would prefer it were law, but second best would be a place where companies could opt out of the anti-culture of wall street and still be publicly traded.
News happens and things change quickly. Also there is arbitrage between similar assets, and investors benefit when that arbitrage is reduced by frequent trading.
I think the ‘Texas’ part in the TXSE is mainly from a business procurement pov. They’re hoping to capitalize on the recent growth in the area, which is possibly ripe for a lot of new listings. The actual electronic trading might still originate in NJ.
I don’t believe they’ll have a floor. I think they are going the NASDAQ route, unless I’m confusing them with Long Term Stock Exchange (I was researching both around the same time).
Take the above with a heap of salt. It’s part my intuition and part things I might have read on the internet (including their corporate site).
Couldn’t they just send some hardware down Texas to co-locate there (presuming specialist hardware) and add another deployment target for their software? Would it be that hard?
The speed of light limits fibre speed which in turn limits high-frequency trading.
Flash Boys by Michael Lewis was a fun read on the subject. One memorable quote alleged that HFT traders would "sell their grandmothers for a microsecond [of edge]"
for an interesting reversal of the "problem" of the speed of light, IEX is a stock exchange design to combat HFT by adding a physical speed bump by way of 38 miles of fiber optic cable. The general idea being to level the playing field and improve market liquidity using physical communication limits of light.
https://en.wikipedia.org/wiki/IEX
Not really because anyone running a trading strategy that needs to worry about latency is already running their servers in the same datacenter as the exchange, so that just moves with it. What probably is an issue is that the datacenters required for a market don't look like AWS datacenters. I don't have any direct experience here, but I would be shocked if HFT software is something you could just deploy to a standard VM like on AWS.
Pardon my ignorance but can anyone can help me figure out what does it mean to have a new stock exchange? Dont exchanges sell the same stocks? Is it just a way to earn some fees by capturing some of the trades in their platform?
I'll obviously google it now but I'd appreciate some insight.
Each exchange can make its own rules for what it will list and how it will trade (within the broader SEC regulations).
So yes it’s just a way to capture fees from listers who like your exchange better as the primary listing exchange and from market participants that must be in every exchange (latency sensitive HFT).
None of the many exchanges that have started have made a dent in the existing duopoly for real share listings that Nasdaq/nyse have. But some exchanges have made good business off of other products like etfs.
So in other words, healthy competition, and may the best man win. Contrary to many comments this is more than political reaction/posturing.
The state of Texas is the world's 8th largest GDP and a diverse one, with no one sector exceeding 9%. Texas is well-positioned relative to NYC for attention around AI, as it is not geographically constrained and has an energy advantage. There is financial credibility built in as 10% of NYSE listings are already HQ'd in Texas. And Texas has a pro-business regulatory environment.
This isn’t a zero-sum game where Texas grows at New York’s expense. The hope is it creates a larger, more dynamic market.
All true. Texas worker environment is not great though. Folks typically list income tax as an advantage but property and sales taxes more than make up the difference. Also, govt admin is fairly hostile to any infrastructure expansion, preferring to let the local car dealers buy new town charters with no infrastructure.
Environmental regs are not well managed generally.
Anyhow, not the worst state, not the best. Pretty balanced economy, like Ohio, Illinois, California, and Georgia.
Ideally you're correct - but it does have the very large side effect of making real estate fraud much more lucrative. This isn't to say that the potential of people breaking a law means we shouldn't have the law at all - but higher property taxes necessitate a much large spend into property value auditors and require a lot more stringency around property improvement permitting to ensure that increases in property value are captured and recorded accurately.
How much fraud we talking? I like to think along Matt Levine's ideas that at least some amount of fraud is acceptable - there will always be some amount of it and under or over-regulation creates a net-negative.
For sure. Probably should be using the total homestead exemption eligibility as the denominator instead of prop tax receipts. Even then transfer tax is a "hill" and the homestead exemption is a "valley." But It's hard enough to estimate any of this data from a keyboard in a few seconds
Yep, exactly what I mentioned, more than makes up for it especially once you factor in the higher Case Schiller on recent years causing increases to property taxes since 2022 (date of your image).
Local state legislature has several car dealership owners that also started their own chartered towns. Wasn't thinking about starbase but that qualifies.
What a strange thing to say - - "sucks to be you if you don't like it, just leave" is not really how I'd expect people to have a conversation around identified policy gaps, especially among people that aren't there.
NYSE Texas didn’t see a huge influx of listings when they moved there and changed their rules. I don’t think “Texas” is particularly interesting to the conversation given the dominant regulatory regime will be federal and the trading will happen in NJ but I could be wrong.
There are lots of stock exchanges, which have started for lots of reasons but there isn’t really much of an industry desire to be out of nyse/nasdaq for vanilla listings. If there was it would have already happened.
Seems like a publicity stunt to siphon some regnms traffic and maybe some etf listings to me, but no big drama if not.
>This isn’t a zero-sum game where Texas grows at New York’s expense.
Not at all.
New York is standing to gain quite a bit.
>TXSE was backed by wealth management giant BlackRock and market maker Citadel Securities, among other firms.
>The Texas company said in June 2024 that it raised a total of $120 million from more than two dozen investors.
Ever heard of "The Texas Company" from 100 years ago when they first discovered huge gushing oil wells in Beaumont? Popularly known as Texaco, it was of course, a New York company.
Go back before 1837 and Houston itself was unpopulated ranchland while San Antonio and El Paso were well-established western towns.
Until New York investors bought the ranch and built the planned industrial community we know today.
As someone who's considered taking my company public (not a tech company) it's nice to see easier listing requirements on this exchange than the big ones.
The most insightful part of your comment was that you needed a throwaway account to preserve your HN social credit score to take a completely moderate and constructive position.
This sounds like the sort of "norms" thing that a GOP-leaning state would abuse to circumvent SEC regulations by somehow declaring a state-owned exchange as some sort of SEZ to allow unregulated exchange between domestic and (primarily) foreign entities.
To add on the "make it's own rules" point. This is a real thing, there are stupid rules which have been put in place at various moments and many companies are sick to death of it.
No. Each company chooses what exchange their stock is sold on. Sometimes (often for large companies) you are on more then one exchange, but never all of them.
Nothings stops an exchange (laws may not allow this but remember exchanges are in many countries and only subject to the laws of their country) from handling stock that the company doesn't want on them, but the value of an exchange is other people are looking there when they want to buy and sell and so it would be hard to get enough traders if the company doesn't want to list with you.
Not all exchanges handle stocks. There are other things traded as well.
> the value of an exchange is other people are looking there when they want to buy and sell and so it would be hard to get enough traders if the company doesn't want to list with you.
Doesn’t regulation NMS make this significantly less relevant? A stock trading on an exchange where it isn’t listed is going to trade at the same price as everywhere else, modulo however long it takes to arbitrate the price between the exchanges.
Also, I too am struggling to understand posting a trade of an unlisted stock to an exchange. This sounds pretty similar to a dark pool?
Stocks trade when there is a buyer and a seller. An exchange you are not officially listed on is unlikely to have many sellers and so they may not have any stock when you want to buy. Of course they can keep a lot of stock on hand (that is become a market maker), but that means they arbitrage games (either they or someone else), and if their volume of trades is too low (which it will be because few traders think to to use them) they are going to lose money on that deal.
Back in 1800 an exchange was a place where a lot of buyers and sellers agreed to meet up so that you had good odds of finding a buyer when you wanted to sell. The exchange happened by exchanging papers which then got sent to the company to know how the new owners were.
This gets at why there were a lot more exchanges in the past than now. Ownership is recorded electronically (you can get paper but almost nobody does) do you don't need to send papers into head quarters. We also have fast communication so can have your agent take care of things in New York in seconds no matter where in the world you are - in 1800 you had to physically go to an exchange (or send an agent).
An unlisted exchange is similar to a dark pool. The company whoes stock is traded on one will treat the trade like any other dark pool. However if they are trying to operate like a listed exchange they will doing other exchange like things (posting prices), so you get the worst of both worlds.
Most (this is close, about half) stock trades are not on the listed exchange. If I sell stock and my broker has someone else wanting to buy that stock they are just going to internally match us up at the current price instead of going to the listed exchange. There are a lot of "dark pool" exchanges that brokers will check with first when someone wants to buy/sell stocks and so only rarely (again about half the time - not very rare) will they go all the way to an exchange.
Nothing stops an exchange from accepting trades for a stock that isn't listed there. (there may be local laws that say otherwise, but there are lots of different countries). However if you are not a listing exchange brokers might not think to check your exchange when someone wants to trade and so you won't get enough volume. If you are the exchange a broker checks first though you can be the exchange.
Loose language here: in the US you choose which exchange you want to be your primary listing. Listed securities can and usually do trade on all exchanges. Exchanges have different liquidity profiles and market makers. The rules are enforced to ensure that you can send an order to any exchange and you should always get the best price even if it's on another exchange. During regular market hours...
Mostly yes, but a more optimistic (if naive) perspective is that the exchange wants to bring something new and valuable to the market. There are tons of little rules on exchanges about how stocks trade, and these can affect the amount of stocks and prices of stocks that different investors are able to get. These rules (often called microstructure) are partially determined by law, but there's differentiation between exchanges, and so one of the things a new exchange can do is introduce different rules that might make the market more "fair" depending how you define that.
In this case it's a marketing ploy for the state of Texas and also a way for Schwab, citadel, blackrock and fortress to press their finger on the balance of power which is far tilted towards the ICE.
Also note Schwab is headquartered in Texas and they account for a significant percentage of trading in the US on a daily basis.
Surprisingly, no - moving a stock from one exchange to another is a lot harder than selling on one and buying on another (and slower, and more costly for small quantities), so stocks are surprisingly immobile. Only if you really had to, would you move them. And most stocks have one particular home exchange and there's no reason to trade them anywhere else than the one place that has the highest volume and lowest spreads for that stock.
Many HN readers with an interest in HFT will find the Sniper in Mahwah blog excellent reading. No longer publishing since 2019 as far as I can tell, but it was great while it lasted:
Trade matching algorithms (prorata, FIFO, TOP) and rules (capital requirements, market impact definitions) will align with the interests of the most profitable customers.
Citadel Securities, with their HFT-level returns of 50-100% per year will not venture into a losing business.
Note, CitSec is different from Citadel (hedge fund), and the hedge fund is also crazy with 40% annual return before fees (past 20 years) and 19% after fees to the outside passive investor.
Is there anything interesting or novel about this exchange, other than its headquarters are located in Texas?
From what I can tell, the primary data centers will be in New Jersey like all the others.
TXSE's goal is to provide greater alignment with issuers and investors and address the high cost of going and staying public.
The alignment part translates IMO to avoiding political / social science policy issues like avoiding affirmative action listing requirements like the Nasdaq Board Diversity Rules that was just recently repealed: https://corpgov.law.harvard.edu/2025/01/12/fifth-circuit-vac....
So it is as one might imagine, the formation was probably for similar reasons why owners are moving their company registration out of Delaware.
In a structurally-biased environment, the loss of policies that counteract that bias does not allow companies to "avoid" politics and social science; it allows them to take the side in favor of the structurally-biased status quo. Just so we're clear about what that is.
Delaware law exclusively protects the interests of the board of directors. It allows for a unique provision - the hilariously misnamed "Shareholders Rights Plan" that enable a board of directors to issue shares as they please, in order to make sure every attempt at takeover isn't against the interests of the directors.
The only check on the power of the board in a Delaware corporation is the Delaware court of chancellery.
The irony is that the Levine article the parent provided argues that DE did the exact opposite of shareholder wishes!
> it is weird that Tesla’s management and board of directors and (a large majority of) shareholders all agreed that Musk should get paid $55.8 billion for creating $600 billion of shareholder value, and he did do that, and he got paid that, and a judge overruled that decision and ordered him to give back the money. I can see why Musk — and Tesla’s board, and its shareholders — would find that objectionable! They’re trying to run a company here.
The "real reason" people "freaked out" about Trump dismantling agencies is that he was and has been ignoring the law by fiat and not executing the law as is his constitutionally defined role. It would be one thing to veto a refunding of the DoEd, to approve a dismantling of the DoEd; it's another to unilaterally dismantle institutions that have been enacted into law by Congress. The DoEd is no more unconstitutional than the DoD or any other cabinet-level institution.
I think it's fair to have a hard discussion about the effectiveness of or need for the DoEd, but the way to do that is in Congress, not by fiat by the president. The way the Trump administration has approached it IMHO is grossly unconstitutional and a violation of the separation of powers. The only semi-reasonable rationale I can think of is that Congress is implicitly approving of or voting on the president's actions by not impeaching him, but that seems like an unreasonably high bar, equates lack of action with active approval, and it also infringes on the power of the Congress that enacted the law.
As someone else here on HN noted recently: what is the point of anything pertaining to congressional vote procedures, veto authority, overrides, and so forth if the president ignores, and is allowed to ignore, the laws that are passed anyway?
> mental shackles of subordination to psychological abusers and manipulators that are constantly pushing the idea that state's rights are subsumed to federal rights
Wow. The inter-state commerce clause is a real thing and it does give the federal government broad lattitude to regulate "commerce" across state lines. Commerce seems to entail the flow of both goods and services. We are in this situation because people at the state level decided, democratically, that some decisions should be made federally so as to avoid a huge patchwork of differing laws. To put it bluntly, I don't want to have to carefully review and compare Oregon state law with say Texas state law before I undertake any travel lest I accidentally commit a felony in Texas by doing something that isn't against the law in Oregon, and that's a really good reason to try to limit the differences between the two. If you don't, you'll necessarily chill travel and commerce across state lines because those differences will present a huge barrier to entry and create a big suck on peoples' time and attention.
> These United States, and after the Civil War the de fact illegitimate federal government called itself The United States
This is getting into Soverign Citizen type reasoning.
Run by Blackrock & Citadel, instigated in part to circumvent DEI protections, in a State that can’t keep their power grid stable, promising less regulations for the people running it and listing their companies on it.
Simply put, this is Republicans pushing for “Y'all Street". Target one will be earnings reports, but the eventual push will be to not be overseen by the SEC in some important capacity.
The actions generally do not seem to match the words, and seem to point to a general trend of deregulation and lack of oversight (as the administration has said they would do, and especially in the crypto space has essentially stopped prosecuting crimes)
Going up-thread, here's the original claim under contention:
>> will be to not be overseen by the SEC in some important capacity.
Your articles don't dispute this.
As for whether oversight will be "weaker" and more de-regulated, maybe.
1. There's a headcount reduction. At worst, there's a quote that some really experienced watchdogs are out the door. Hard to tell until we get outcomes.
2. As for withdrawal of proposals, look closer.
> Although most observers doubted that the current Commission would adopt these proposals
Which makes it sound like the proposals were just withdrawn for later submittal and new discussion. Footnote #1 goes into how this isn't really unprecedented, citing similar withdrawals (or resets) under the Biden admin.
Sure, I am just saying the comment about "hunting crooks more aggressively" seems to run counter to their anti-regulation stance, and their active lack of hunting crooks.
I don't think the NYSE had any DEI requirements, but the NASDAQ created a rule where boards needed some minority representation in order to be listed. That rule was challenged and overturned in court though.
> On August 6, 2021, the SEC approved Nasdaq’s proposed diversity rule for companies listed on its exchange. The rule required Nasdaq-listed companies to (1) publicly disclose board-level demographic data annually and (2) have, or explain why they do not have, a certain number of diverse directors on their boards. Companies with more than five board members were required to have two members from an underrepresented group, including one female and one person who self-identifies as Black, Hispanic, Asian, Native American, Alaskan Native, Native Hawaiian, Pacific Islander, biracial, or LGBTQ+.
Right. Just like all the autocratic Project 2025 plans, defunding healthcare to give tax breaks to billionaires, sending US military to police US cities, and all the other current actions were " tinfoil hat conspiracy thinking".
There is a party actively committed to implementing autocracy as fast as it can. To willfully ignore that and attempt to deflect from it as you are doing is wrong.
Moreover, if you don't think an autocracy will hurt YOU because you are in some protected group, you are wrong — it might not hurt you first, but it will hurt everyone, including you.
Right, from a 24-day old account making only right wing political comments, a comment that addresses exactly zero of the points made by the initial post.
And regarding ignoring fascism/authoritarianism, you need only look at the difference between fascist and democratic societies
In democratic societies, the three branches of govt are independent, and the branches of civil society, press, academy, religion, business, industry, finance, entertainment, sport, and non-profits are ALL independent.
In autocratic societies, the power of the government is abused to corrupt or coerce all three branches of govt and all segments of civil society to serve the will of the executive.
EVERY single move by the person occupying the President's chair and his party as been to reduce or undermine the independence of the other government branches and all segments of civil society. The party who claims to be about "free enterprise" and "free speech" is seizing ownership of corporations, directly interfering in individual hiring decisions, and even making govt threats to get COMEDIANS fired. Seizing ownership of corporations, even partially, is more typical of Communist governments than democracies.
See if you can find a single substantive exception since 20-Jan-2025 where this administration increased freedom of expression or freedom of economic action, especially when such expressions or actions were unfavorable to it.
Lecturing people on basic US civics doesn't really prove anything.
Lifting prohibitions on nuclear power and nuclear research would qualify I think. That took me about 5 seconds to come up with.
Your side is losing, so you attack, attack, attack. But all you are doing is driving reasonable people away. Your hyperbolic rhetoric is literally getting people killed. And you lie about the victims to justify that violence.
>>Lifting prohibitions on nuclear power and nuclear research
The first thing coming up when I search that phrase is literally everyone but the current administration doing so: 1) World Bank, 2) Denmark, 3) Illinois Gov Pritzger (Dem), 4,5,6,+) Asian Bank. So, perhaps the administration has also reduced regulations in this area, but this is not an economic freedom that reduces concentration of power, particularly as this administration requires a vig to play in every area it can.
As to the rest of the allegations, they are vague, broad-brush, hyperbolic and entirely devoid of any actual examples. No truth at all, or only the kind of "truth" found on Truth Social.
But you do follow well Goebbels' instruction to accuse the enemy of that which you are guilty
OpenAI will be the largest IPO in quite some time, so I totally see why RH is trying to profit off of additional derivatives on this thing. Volume will be off the charts.
Depends what you are looking for. Is it real time quotes?
IEX data is now free after 15minutes instead of 15milliseconds.
One option is the Databento US Equities Mini for 200 USD per month. If I understand it correctly it is some sort of weighted average between multiple exchanges.
I've been happy with Databento as a low-friction way to get market data. I liked it so much, I ported their structs and APIs to Golang. [1]
Their EQUS Mini dataset is a great way to dip the toe if you want live data without licensing restrictions. Databento's article talks exactly about how it is sourced, but it is not that it is averaged but anonymized, specifically because of the complexities of upstream exchange licensing. [2]
You don't have to pay $200 per month for that -- that's for all-you-can-eat. You can experiment with pay as you go.
You can use my dbn-go tools to help you... here's the cost to get all the 1-day candlesticks for all the US Equity Symbols for 1-year... which you could use to make all sorts of charts and redistribute them freely (the trickiest part honestly):
So $4.38 for all that data or $3.78 for just the NASDAQ exchange (not sure of redistribution of that one).
I hang out on their Slack. Today there was a deep discussion about optimizing C++ SPSC queues, although it is usually isn't too technical like that. They are pretty transparent about how they implement things.
Ah so no timing arbitrage in finding a place in Tennessee where data arrives from both places milliseconds apart and you can explore minor differences in pricing
People online like to yak about the woke nonsense.
Reality is there are tax and regulatory advantages. The courts are setup in a way that is favorable to business. They read a very strict interpretation of contracts which is good in some scenarios.
Texas politics is a train wreck, but their bureaucracy is pretty good for a business - things like permitting and other regulatory processes are faster. They also will firehouse you with incentives.
> Reality is there are tax and regulatory advantages. The courts are setup in a way that is favorable to business. They read a very strict interpretation of contracts which is good in some scenarios.
> Texas politics is a train wreck, but their bureaucracy is pretty good for a business - things like permitting and other regulatory processes are faster. They also will firehouse you with incentives.
None of that is really relevant to a stock exchange though. Being on the Texas stock exchange doesn't mean you are subject to Texas laws and regulations just like being on the New York Stock Exchange doesn't subject you to New York laws and regulations.
As far as I'm aware, all of the major exchanges in the US are in NY or in Chicago, and even then, Chicago is mostly just futures exchanges for commodities and not stock exchanges. So unless you're headquartered in NYC (which most companies listed on NYSE/NASDAQ are not), you're already not working with a stock exchange in the same area as you, and failing to collocate the stock exchange isn't really a detriment. (Interestingly, even historically, when stock exchanges were more plentiful in the country, there just doesn't seem to have been much demand for a stock exchange on the west coast at all.)
The main reason to move away from the NYSE or NASDAQ is if you don't like the rules those stock exchanges have.
Also, this is a fun nugget from the Reuters article about this new exchange providing competition to NYSE and NASDAQ:
> But those rivals are not sitting idly by. On March 31, the NYSE opened its own Texas outpost, disclosing that Trump Media & Technology would be the first company to list there.
The owners of the house can’t wait for their cash cow to grow up and print money so they will take it public and cash out with promise for future returns. This is a game as old as capitalism.
> At $2.4 trillion, Texas' economy is larger than many countries', including Russia, Canada and Italy, according to a report from the governor's office.
California's economy is $4.1 trillion and has a much higher chance of growing larger with most of the AI companies based out of CA.
Not sure I understand your point. If someone wants to open an exchange there, what’s stopping them?
I’m a Dallas resident and this has been a large coordinated effort that has a lot of banks relocating here. Not going to debate the good or bad of it, but Texas tends to go after these types of things and creates a favorable environment for it from a business/tax/political standpoint. I don’t know what California does, but I know a whole bunch of Californian corporations have moved here citing similar reasons. So again, what’s stopping something similar from happening in California? (If it doesn’t already exist)
What's to stop states from increasing the amount they compete with each other to lure businesses by reducing regulations, lower taxes, etc
I think this is a loop that hurts regular people.
Less regulation could open people to more risk and less ways to combat it.
Lower taxes for businesses means that state funding must be made up with either cuts to services or higher taxes on people.
I think Republicans will use these incentives and the federal government's power to push all the money to red states causing economic decline in blue states which they can then blame on the leaders of those states.
I know this already happens but now that Trump is open to blackmailing states with funding because they aren't run by Republicans it will get worse
Almost every thing happening right now involves organizations that have been making plans to do things for a very long time that is being hyper accelerated or the competitive landscape drastically distorted to give advantage.
I should be happy right now as X and Y and Z are available, some of which support some of my ideas, but I'm smart enough to know that giving me a few trinkets while screwing the system as a whole doesn't work.
They already have multiple trillion dollar companies and how has that worked out for them? Rampant homelessness and crime in their "Premier" cities, skyrocketing cost of living and housing prices, etc.
Doesn't this increase opportunity for arbitrage as it's not likely exchanges are going to be perfectly synchronized to the overall market? Also doesn't this also offer opportunities to sell pink sheets stocks in what is conceivably a "fresh market"?
There used to be a variety of exchanges on the West Coast but it seems like they couldn't compete with the automation and HFT innovation happening in NYC, all the west coast engineers were too busy with the dot-com bubble it seems.
This headline is kind of dumb. Yes, there is yet another new venue. But other recent "new" venues include MIAX, IEX, MEMX, and soon to be active - 24X. Oh and let's not forget the Long Term Stock Exchange (LTSE).
Doesn't matter where you are you need that. There is no place in the world where the grid is reliable enough that someone who wants to operate with high reliability can get by without ample backup power. Grid power is normally a lot cheaper than running backup power (that is the capital and maintenance costs are sunk costs, just counting fuel) so it isn't worth disconnecting from the grid despite having enough backup power that you could.
There are grids where you are planning for hours of power outage, grids where you plan for days, and grids where you plan for weeks. Texas is in that last category. And you have to ensure your internet uplink has similarly reliable backup power
some former soviet industrial parks are like that. They had redundant direct lines from say local power plant, a direct line from fairly far geographically removed Nuclear power plant and regular grid. They were classified as critical consumer so hospitals would get cut from the grid before they would.
Because the powers that be in Texas will siphon off funding to make things work better to fund their own projects. "Should we winterize our power grid" Nah, it's Texas where it doesn't get that cold for that long. Should we implement a warning system in an area that is historically known for being prone to flash flooding? Nah, it doesn't happen that often and we have other things to spend money on instead.
What conspiracies? These are actual things that happened delivered as a sarcastic dialog that goes to show how the government in Texas behaves. Also, I never claimed anything about investors of TXSE. At the end of the day, it doesn't matter where an SE's data centers are located. They will all need redundancy plans. If you think Texas is a better location than other sites, then you have to focus on what have historically been issues for Texas. If you depend on the state's government doing things other than lining their pockets or at least the favorite pet project's coffers, then you are prone for failing. Those unwilling to study history are doomed to repeat it
I'm afraid your comments just come off as an attack on local politicians and their priorities, not the topic of addressing whether TXSE could be more resilient than peers.
The discussion evolved into where the data centers would be and pros/cons of having them in the various locations. I was discussing the cons of a Texas location
Tho energy is also a lot cheaper in Texas than NY. If you have to have ample back up regardless, total cost of maintaining consistent power can be lower even when grid quality is lower
(ofc, I'm looking at retail rates, who knows what specific numbers can be cut in contract)
Is this true though? Texas has had some well-publicized failures (well, really one major one), but as best as I can tell they are more or less middle of the pack on grid reliability[1].
I mean, you'll need a backup generator anywhere, but the report I found (admittedly with just a bit of googling) makes it seem like Texas is a better potential location than quite a few states (including California).
The really major one is the only one that matters. If you are running a datacenter that needs to always be up and running, you're going to need backup power. A power grid that goes down once a decade for multiple weeks is far worse than one that goes down for 5 minutes once a week.
In Texas, if you support those in power with good enough donations, you can ensure that your site does not loose power when the decision is made on who to disconnect. So you can spend the money on back up power equipment, or in donations. Either way, it's going to cost to play.
Yeah, Oncor isn’t great. They do just enough to keep the lights on for regular customers. But I’m pretty sure large data centers negotiate a higher level of service and purchase power at discounted rates. FB, for example, has a massive data center in the Alliance corridor — check out the link. Those trailer-sized units you see along the outside of the building are enormous diesel or natural gas generators — more than a hundred of them, each about the size of a locomotive. They even have their own electrical substation. The scale and redundancy of that place are unbelievable.
So I’d imagine they could keep everything running for as long as necessary. I remember during the big winter outage a few years ago, they didn’t have any issues at all.
Each building has 2 large fuel tanks which is where I was expecting to see a fault in the plan. I wonder how redundant the fuel supply is. If building 1 is the only one on generator power and the fuel tanks start to run low, can they easily route more fuel from another building's tanks? Just how paranoid were they with the design?
When ever there is an extended power outage at a facility like this, tankers show up. I would not be surprised if there are contracts with Suncor distribution to have a steady flow of tankers supplying fuel to the facility. There are several fuel distribution hubs throughout the DFW area that supply the local markets including two major airports.
That's a big assumption, and precisely why the tanks are on site. If snowpocalypse events make roads unsafe to drive, those tankers might not be there. There's always a way to think about how something else could go wrong. At some point, you just have to say it is good enough for the money willing to be spent.
The NY4 data center is on the edge of a tidal marsh (The Meadowlands) in Secaucus NJ, I would be curious to know Hudson County NJ uptime and the uptime for the area near the Texas data center.
ChatGPT is a long, long way from being able to successfully analyze this sort of thing. Texas's failed in a way that caused people to freeze to death that's unlikely to occur in NY.
The people who live in Texas are completely and utterly shocked every time the temperature goes below 40F. Even though there is some kind of "winter" weather almost every winter, none of the houses or commercial buildings have insulation on any of the pipes. A lot of high traffic roadways are elevated and banked making them completely unusable if someone so much as spills a coffee on them, let alone having ice or even just rain on them. "Winterizing" is just not a thing. It is always deemed too expensive. Then disaster strikes, everyone freaks out, then forgets about it in a few months because the temp in the summers stays well north of 100F for weeks at a time. OF COURSE they haven't learned. It goes against human nature to think more than a few months ahead when the state "rainy day fund" is at stake.
It would be helpful for readers to know what Equinix is
> Equinix's infrastructure supports the digital services businesses rely on, from cloud computing and enterprise applications to content delivery and financial trading platforms.
But depending on the setup, often you just cant "sell the one thing at another exchange which you bought earlier at a different exchange", sure this depends on the country/etc.
There may be some odd financial instrument that can only be traded on a single exchange, but that's generally not going to be something that is liquid enough for HFT trading anyway. The idea that a stock is listed "on the NYSE" and can only be traded there is a quaint anachronism. e.g. https://help.tradestation.com/10_00/eng/tradestationhelp/rou...
In fact, it won’t be. Which is why NYSE was so quick to rebrand NYSE Chicago as NYSE Texas when TXSE made the announcement they were launching in Equinix NY4 in Secaucus. The only real differentiator these guys would have had (outside of listings rules) would have been location, but they opted for the lower resistance of locating with all the other markets.
"There have been 263 power outages across Texas since 2019, more than any other state,
each lasting an average of 160 minutes and impacting an estimated average of 172,000
Texans, according to an analysis by electricity retailer Payless Power
(https://paylesspower.com/blog/blackout-tracker/)"
Also in 2021 210 people died. This is a huge deal. This wasn't just a little outage.
That website shows California as currently worse. It looks like Larger states just have more power outages, which is to be expected. Texas also is a weird state that is very large it gets Tornadoes, extreme heat, and hurricanes, while also having several very large metro areas in it. There also isn't anything indicated differences in grid monitoring, are all grids (like large rural grids) monitored to the same levels?
We also have a lot more growth in the past few years than most other places, both in relative terms, and in absolute (big state + high growth introduces more absolute friction than small state). Demand is forecast to rise over 20% from 2024 levels vs. an American average under 5%: https://www.eia.gov/todayinenergy/images/2025.07.31/main.svg
We have high power demand in both winter and summer: in the latter, air conditioners use a lot; in the former, about half of Texans heat with electricity because we have less cold and so less usage of cost-effective, grid-preserving furnaces.
Texas has been building a ton of wind and solar to supplement generation capacity and is taking some leadership in the next-gen nuclear stuff for a reliable base load, but in the mean time the shortage of CCGTs is going to bite in a state where demand goes up this much, this fast. SB6 passed this summer also should help with reasonable control and oversight.
California has power outages as a matter of routine in some places. When I went there the rural areas were constantly experiencing load-shedding power outages and some of the rural lodging advertised that they had backup generators because this is so routine there.
Yeah, but that isn't really an apples to apples comparison. Texas for example had ~400 heat deaths in 2024 depending on where you look but in 2023 it was 334 or 563 depending on your criteria [1].
>But I want to put it into perspective. In 2024, ~62,800 people in Europe died to heat-related events.
Most of these deaths are not because of electrification but the fact that homes are built out of bricks and mortar and become ovens with heat waves that get hotter each year and ~10% to ~20% [2] of homes in Europe have air conditioning meanwhile ~95% [3] of homes have air conditioning. Your apples to oranges comparison mostly shows how Europe is generically unprepared for climate adaption (specifically heat resilience) and has nothing to do with electrification stability.
The vast majority of these 400 heat deaths have nothing to do with the power grid. They are people living outdoors, roofers, elderly, etc. When the temps hit 105+ for long periods there are bound to be people who don't have access to AC or overexert themselves outdoors.
It's a perfect apples-to-apples comparison if you level accusations of grid incompetence at Texas. Should all those EU homes suddenly go out and buy AC, EU power grids would have to enact massive load shedding during heat waves. Such waves already push demand up, causing local blackouts and price spikes: https://www.ft.com/content/23b3dc59-b40f-48e2-ad93-e301de7ac...
Texas has installed a vast number of solar and battery backup systems since 2019. And it will be a few years, but is going HEAVILY into nuclear (and for the next 3.5, is going to get auto-approval to actually build them. ERCOT is changing fast, don't rehash stale narratives.
Only as long as the Texas politicians don't sabotage wind. Texas businesses make lots of money on wind, but the legislature and governor absolutely hate it.
Having experienced the Snowpocalypse and mini Snowpocalypse, weeks of 2019 PG&E PSPSes, and the 2000–2001 CALISO-Enron rolling blackouts, it's ridiculous for those in glass houses to throw stones.
So about one every 9 days that affects 0.55% of the population. So in a 3 year window a Texan has about a 50% chance of losing power for 2.5 hours. Seems pretty good to me.
> Texas loses power one time for a week and the redditors will never let it go. Wild how this is still a cringe joke so many years later.
Texas had the most number of power outages between 2019 and 2023 [1].
It wasn't one time. And it's not a joke. Infrastructure weatherization is a very real overlooked (and expensive) investment that still has not taken place.
> In 2011, Texas was hit by the Groundhog Day blizzard between February 1 and 5, resulting in rolling blackouts across more than 75% of the state… Following this disaster, the North American Electric Reliability Corporation made several recommendations for upgrading Texas's electrical infrastructure to prevent a similar event occurring in the future, but these recommendations were ignored due to the cost of winterizing the systems.
> Unlike other power interconnections, Texas does not require a reserve margin of power capacity beyond what is expected. A 2019 North American Electric Reliability Corporation report found that ERCOT had a low anticipated reserve margin of generation capacity and was the only part of the country without sufficient resources available to meet projected peak summer electricity demand.
If I hadn't been reading headlines I wouldn't have even known about the 2011 blackout, and I was definitely here for that. Things were pretty much normal for everyone around me and friends around the state (Houston, Austin, DFW, Lubbock, San Antonio, etc). The Superbowl even went ahead in AT&T stadium. It really wasn't as big of a deal as a lot of internet commenters seem to act like.
I lived in Texas and we never got rolling blackouts for this. We didn't hear about it from family and friends in every major Texas city. Maybe this means 75% of the state by area rather than population? We just didn't drive because much of Texas isn't set up to clear roads and, more importantly, few of our drivers know how to deal with snow and so most get very unsafe to drive around.
The report your wikipedia article cites for 75% says this: "In the case of ERCOT, where rolling blackouts affected the largest number
of customers (3.2 million), there were 3100 MW of responsive reserves available
on the first day of the event, compared to a minimum requirement of 2300 MW." So an eighth or so of Texas' ~25 million population in 2011.
You originally called someone a redditor making a cringe joke for highlighting a serious historical problem. It wasn't clear to me that it was a joke at all, but my impression is that it seemed clear to you that it was a joke.
What if that person has also lived in Texas for 30 years? And what if they had a family member that died during that power grid failure in 2021? I personally would find it quite difficult to communicate to them the nuance of a local problem and a state-wide problem when the end result is the same: no power.
In the future, you might consider approaching an interaction online with more balanced judgement.
Edit: Actually, looking back at the original comment, it's not even clear they're talking about the Texas power outage in 2021. All they said was "Hope they have ample backup power." Seems like a reasonable thing to hope for what might be critical infrastructure.
I'm not sure what is meant by Redditors... I haven't used Reddit in many years.
Admittedly anectodal, but I don't remember any power outage here in Chicago over the last 11 years I lived here, but I was in Texas for work for a few weeks this summer at the NASA balloon base and there were multiple power outages.
Anecdotal, but I've lived in DFW for over a decade. The only time I lost power for more than a minute was due to a drunk driver hitting a utility pole just outside my house. They had the pole fixed and everything working again within an hour.
The Houston metro area is particularly bad. When I lived in Austin, the outages were very rare. In Houston, I would guess there is at least 1 outage every month that lasts for an hour on average.
Texas' grid was very reliable when I was growing up there. Since deregulation however, it's no longer reliable. It used to be mandated that grid facilities were overbuilt to have some headroom for emergencies. That's no longer true. Now, Texas utilities only maintain the minimum infrastructure needed for normal operations and they have no cushion if something goes wrong. Any CEO of a Texas utility that spends money building overcapacity gets fired by Wall Street.
This was supposed to change after the 2021 crisis, but I haven't seen much evidence that it has.
The US did do this for most of the 20th century. Or at least something close to this: Many utilities were private companies but they were regulated monopolies. The state allowed them to be monopolies in exchange for tight state control.
In the 1990s this started to change. The idea was that the different utilities could compete for customers, and thus they wouldn't be monopolies any more and thus market forces would take the place of government regulation.
Of course this has failed spectacularly. Deregulation brought us the Enron disaster and the 2021 Texas grid crisis, among others. But since corporations control the US government now, there's no chance regulation will be brought back.
I'm surprised that you put the blame squarely on the the (bought) government.
Deregulation and "free" markets are something that many americans actively want. You can argue that they're misinformed and they're advocating against their own self-interest. But it's still something they actively want, this isn't just the evil corporations taking control of the corrupt government.
In fact on this very site I'd wager that more than half of Americans users are against regulation in general, state ownership of any utility, or any additional control on financial markets.
It's not just the "snowpocalypse". In Houston, for example, there have been multi-day power outages since then, often during hot weather where lack of adequate cooling can become a life-threatening concern. Personally I don't find it any more "cringe" than the weird boasting people like to do about our state.
Reddit can become a echochamber, a one sided flog machine, all good content decaying, no good or viable business after 10 years (propped up by YC investors), it’s even become a slur to denote a certain type of brain and eventually it will die off like slashdot and digg did.
But you won’t be able to take the Redditors off the internet. They be lurking, waiting with a perfectly annoying post ironic millennial reply.
I hope the TSE does well and expect the state with the largest concentration of energy tycoons and businessmen will figure out how to add grid robustness - a problem solved in nearly all states.
> expect the state with the largest concentration of energy tycoons and businessmen will figure out how to add grid robustness
This reads like the energy tycoons and businessmen only recently moved to the state, and now they can fix the problems. My understanding is that these energy tycoons and businessmen presided over the creation and deterioration of the Texas grid in the first place.
> grid robustness - a problem solved in nearly all states
Shouldn't that drive the question of why Texas is so bad, though? This argument seems to amount to "Everyone else is better than us, so we must be the experts in fixing the problem.", which seems weirdly backwards.
Texas has more reliable electricity than California
considering the California electricity provider PG&E shuts off the electricity multiple times a year when it gets windy outside, to prevent power lines falling (due to lazy maintenance) and starting a wildfire
I wonder where the California’s additional 13% tax on capital gains is being spent? SF parking ticket enforcement?
"us versus them", "blue vs red", "liberals vs conservatives"
Texas is the favorite punching bag of the left, and California is the favorite punching bag for the right. When one side is attacked, they defensively jump to the default. Which is kind of ironic, when you consider there's more Democrats in Texas than in many "blue" states, and the inverse is also true for California.
I can find many Republican representatives, Trump, and media personalities insulting New York with sweeping generalizations and hateful rhetoric.
The only negative comments from Democrat representatives and the media on the left I see is are critical of specific laws, for example abortion, but they don't insult the entire state or generalize.
Please moderate your techie site and reduce the amount of politics and preaching, or else you will wind up like Reddit, digg, and of course, the once famous Leo Laporte, who is now exclusively preaching his politics to his 100 faithful followers.
It does fluctuate—we can't be immune from macro trends (https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...). But the principles we apply have been the same for many years, and if you step far enough back, the amount of politics is pretty consistent.
Well consider what makes the tech industry different than any other. It's purely cultural forces that define if someone's a techie or not, so of course it devolves into politicking.
We live in an era where its trivial for anybody to learn how to code, and every level of new goalposts you add before saying someone is a true techie is imposed purely by cultural forces.
What is the need for another stock exchange? I hate that I am thinking like this but this is just going to be politicized heavily and companies like Tesla and coke will just switch to that exchange causing further more rift in our society. Where one company lists will become a problem for companies and they cannot be neutral politically even if they really are
There are currently about two dozen national securities exchanges plus a whole lot of alternative trading venues, broker internalisation, and whole market makers that match orders directly. It's a highly fragmented market where one additional exchange will have no substantial impact.
More than that, London and Tokyo both have well known exchanges, and large US companies are often listed on both of those as well. If you tried to tell me that no other country has an exchange I'd call you a lair without bothering to fact check you. (My impression is New York, London, and Tokyo are the big ones that matter in the world and everything else is a me too - but in their niche/country they may still be a big deal)
Most smaller companies are just listing on something like NASDAQ, which isn't confined to a city. With modern computers the idea of an exchange in a city is not nearly as useful as it was 150 years ago.
When you can buy a SCOTUS Justice, you buy a SCOTUS Justice or 6.
When you can buy a POTUS, you buy a POTUS.
Elon bought them all and many of you cheer. Says more about you than Elon but speaks mountains about the core of our culture and our national ethos but mostly about how easy it is to pervert people and their false ideology with money.
Isnt it amazing how few people actually pay attention let alone ask themselves "why?".
The worst part? HN users are much better educated and tend to be much smarter than the average person. If this audience is so easily manipulated, it's no wonder the larger population is being controlled by such obvious tactics.
The "spaceman bad" crowd is so dumb that even when you're arguing something bad against spaceman they just dislike it because their shallow understanding of it is just "spaceman bad so I downvote".
If you took my comment as anything other than asking how your broad strokes trite criticism of "people in power bad" relates to TXSE, you're the one who needs some reflection. I wanted to know more about how your conspiracy laden poem directly connected to TXSE but I guess HN likes to just accept low quality content for real discussion now.
The Miami stock exchange (MIAX) has their matching engines colocated in Equinix's NY4 data center in Secaucus NJ, much like many other exchanges. I would not be surprised if TXSE does the same.
Many trading firms already have their trading engines in that data center and I would assume TXSE would want quick access to that order flow and this might be easier if they are in NY4.
Of course, they may want to have their colo facilities in TX in their own data center, that way they can rent out space and make some extra revenue, but then they'd have to build that out.
> I would assume TXSE would want quick access to that order flow
Perhaps Texas could use a different trading model that doesn't require ultra high speed trading.
Matt Levine often mulls the idea of a system with a trading window that doesn't let the fastest connection to the order book win. Perhaps an order book that works at human speeds so humans can trade too (I can think of a few ways to do it - but would need modelling to try and figure what actually works). He points out that most trades are done in the last hour, so really trading only needs to occur once a day.
The issue is whether a market trading system can be designed with suitable restrictions that beats the current market design (for listed companies and for traders).
Designing markets is hard because you have to assume every player is selfish and only cooperates where it is to their benefit and will defect or cheat if the incentives of the market encourage that (Enron in the California energy markets).
Unlikely since SEC would need to approve of a different system of market trade incentives.
Edit: Personally I would like to see an exchange that was more international. I'm from New Zealand and our good businesses often list on the Australian exchange rather than the NZSX. The system of ADRs for other countries feels like a massive hack.
Reg NMS’s Order Protection Rule (Rule 611) says you can’t trade through protected NBBO quotes, outside a few narrow exceptions. That’s the letter of the law.
The practical effect isn’t just a bit of latency. It rewires incentives. With 611 in place, the question for latency-sensitive firms becomes: what HFT tactics can I run that are 611-compatible? Without 611, the question would be: what HFT tactics actually add value for my counterparties? That’s a very different optimization.
For firms on direct feeds (often building their own synthetic NBBO), 611 doesn’t add much information. The constraint is compliance, not discovery.
Because NBBO is size-agnostic and top-of-book, anchoring execution to it lets micro-lot quotes steer outcomes. You can influence the protected price with tiny displayed size. That’s great for gamesmanship, bad for displayed depth, size-sensitive pricing, and near-touch discovery.
Also: if two informed counterparties want to trade away from the protected price to reflect size or information, 611 mostly blocks that outside limited carve-outs. We lose mutually beneficial, size-aware prints to satisfy a benchmark that ignores size.
On settlement, the uniform benchmark helps in calm markets. But it’s naïve to think that holds through a real black swan. In stress, timestamp ambiguities and fragmented data make “what was executable” contestable, and disputes spike regardless of quote protection.
In a sound market structure, the clearer (CCP or clearing broker) should carry and underwrite that tail risk—margin, default funds, capital, and enforceable rulebooks. Instead, 611 shifts accountability onto quote-protection mechanics, insulating clearers from responsibility and, perversely, amplifying systemic risk when the system most needs well-capitalized risk absorbers.
There is no reason why shares should be bought on sold in time frames far too short for anything to have meaningfully changed about the companies or market conditions.
This is the free market speaking. If there was one exchange there would be ~no~ less latency arbitrage. But there are many... Which creates a competitive landscape and reduces fees for investors. The by product is you have many HFTs that come in to take advantage of mispricings, even if they are on sub millisecond scales. It doesn't harm the company or the investor. Its quite the opposite... Investors benefit from competition amongst exchanges and HFTs.
In addition you have redundancy in the markets system. Exchanges are important for national security... Having everything centralized would risk people's retirements, savings, and more
One other aspect of HFT that is good for the general investor is that HFT injects liquidity, making it easier for a general investor to liquidate their position, which is a desirable thing for human traders. HFT does not magically make human investors engage in more or less speculative behavior.
HFT is an easy thing to attack, but I've never encountered a lucid argument for why it's bad. "It's not fair that I'm not as fast" isn't really a reason unless you explain why removing liquidity (i.e., making it harder for you to find a buyer at your price point), paired with you moving up the "trading swiftness" rankings, is preferable.
Why do we encourage microsecond scale HFT and tout its virtues, yet shut the market down for the majority of every day?
Why not go all the way and have markets running 24/7/365?
The NYSE and NASDAQ are planning to move to longer trading hours, 22/5 and 24/5 respectively.
https://www.bloomberg.com/news/articles/2025-03-07/nasdaq-jo... (https://archive.ph/JySaV)
And while at that. Remove all circuit breakers. Let the markets be free. Whatever they do. Rocket up or down.
We tried laissez-faire unregulated markets in the 1920s and it didn't go well for anyone but the robber barons.
Maybe you expect to be one of them, but you'll probably just end up in the soup lines with everyone else.
> We tried laissez-faire unregulated markets in the 1920s and it didn't go well for anyone but the robber barons.
yes, let's keep creating too-big-to-fails instead and reward them with bailouts for their mismanagement and borderline criminal misconduct.
>yes, let's keep creating too-big-to-fails instead and reward them with bailouts for their mismanagement and borderline criminal misconduct.
Or maybe we live in a world where nuance exists and there are there are more options on the table than anarchy and oligarchy?
the common argument against it is that it guarantees a technological arms race and by those conditions pushes the smaller groups out of the competition.
it's unfair in the same vein that the rich are always offered better loan rates than the poor. Yeah, it's obvious why that would be, but it's not fair either.
although imo pushing small-backer arbitrage out of the equation is a good thing.
What HFT arbitrage does is rapidly push markets with different prices into alignment with each other. If you banned HFT but kept multiple markets, the inevitable result would be markets with bigger differences in prices for longer.
The only kind of trading that really good HFT trading pushes out is other slower less efficient arbitrage traders, but why should we want more worse arbitrage traders if the result is markets being more out of sync?
What's important economically is that traders that trade based on fundamentals can do so efficiently across multiple markets. Efficient HFT arbitrage trading helps that, it doesn't hinder it.
> the common argument against it is that it guarantees a technological arms race and by those conditions pushes the smaller groups out of the competition.
But a cursory examination of history would reveal that the literal opposite has happened.
The issue isn't that there's a lot of change coming from inside the markets, it's that there's a lot of change coming from outside the market, and it's all interconnected.
In a millionth of a second? This a rationalization for something that is only being done because it can be done.
I think you are letting your "speculation is bad" bias interfere with your understanding of dynamical systems.
I think you're hallucinating something I didn't say to avoid confronting what I did say.
Also what's the difference between a system, a dynamic system and a 'dynamical' system?
The behavior of other participants is itself a first-class signal.
Rule 611 compresses that signal. By forcing everything to orbit a size-agnostic NBBO, it collapses a lot of the “behavioral bandwidth” (depth, imbalance, sweep patterns, replenishment, cancel/replace cadence) into a single top-of-book tick. Less resolution, less information.
High-resolution flow tells you who wants what, at what size, and how urgently. When we gate execution through protected quotes, we encourage tactics that flick the top-of-book with tiny size and discourage truthful size revelation. That’s signal destruction dressed up as protection.
Letting informed counterparties print away from the protected price (to reflect size or information) increases informational content. You get cleaner read-through from actual willingness to trade, instead of a compliance-driven dance around a fragile benchmark.
So yes: other people’s actions are the best data feed. The more of that behavior we can see—in size, time, and venue—the better our discovery gets. 611 reduces that visibility by design.
If HFT was genuinely good for the entire market than absolute latency would be what matters but it is only relative latency between HFT firms that matter because they are all competing against each other using the same tactics where whoever is fastest wins.
the better our discovery gets
The better the computers hooked directly into the exchange get you mean.
All participants contribute to price discovery. A nanosecond order book helps with price discovery the deeper it is, regardless of whether orders clear.
> The better the computers hooked directly into the exchange get you mean.
I think you're trolling with this one. But you had an advantage typing your comment into a web browser compared to all the people who wrote theirs on paper and put it in an envelope with a stamp.
A nanosecond order book helps with price discovery the deeper it is, regardless of whether orders clear.
This is a claim, it is not being backed up by evidence.
I think you're trolling with this one. But you had an advantage typing your comment into a web browser compared to all the people who wrote theirs on paper and put it in an envelope with a stamp.
This analogy doesn't make any sense. Why would a person care about nanosecond price discovery? The only benefit is for whoever controls the computers that are able to do it and profit off of it.
If that's not true then why are these firms paying so much money to have nanosecond advantages?
Why do people doing normal trading want to avoid the exchanges that have HFT computers skimming money off their trades?
There is no mutual benefit here. If there was you would be able to explain it clearly and with evidence instead of just making claims about 'price discovery'.
The price is going to get discovered either way just as it has for hundreds of years, it happening a billion times per second does normal traders no good.
> Why do people doing normal trading want to avoid the exchanges that have HFT computers skimming money off their trades?
What's "normal trading"? A prop desk at an investment bank? A hedge fund? A pension fund? Someone who's just installed Robin Hood on their phone?
Most rational participants want lower trading costs and overheads, smaller spreads etc. HFT provides that - the evidence being "look at what the spreads are today, compared with what they were pre computerised trading".
And you don't have to take my word for it, Vanguard thinks this too. https://www.cnbc.com/2014/04/25/vanguard-chief-defends-high-...
> The price is going to get discovered either way just as it has for hundreds of years, it happening a billion times per second does normal traders no good.
Could you explain how a market participant who makes one trade a day is negatively impacted by high resolution price discovery?
> Could you explain how a market participant who makes one trade a day is negatively impacted by high resolution price discovery?
They’re negatively impacted because the SNR drops when the gain is turned up and causes algorithmic ringing to perturb the price that would be generated by high quality signal.
People who extract money by injecting algorithmic ringing into financial markets are a social parasite.
I'm curious which tradition inspires your view...
a) https://www.sefaria.org/Bava_Batra.90b.1?lang=bi&with=Introd...
b) https://sunnah.com/nasai/44
Computers buying and selling shares in microseconds is NOT normal trading.
> The better the computers hooked directly into the exchange get you mean.
I need you to understand that HFT makes decisions based on human-defined parameters. It's not AI-driven. What's the difference between a human saying "these are my parameters, now CPU, go trade based off those" versus "these are my parameters, now underling, go trade based off those"
the only difference is speed, plus i suppose those underlings might suck at following their boss's directives compared to a computer
I need you to understand that HFT makes decisions based on human-defined parameters. It's not AI-driven.
You need me to understand something I never said anything about? No one said AI.
You wrote:
> > the better our discovery gets
> The better the computers hooked directly into the exchange get you mean.
This implies a distinction between "our" (i.e., humans) and "the computers." Can you explain what distinction you meant if it wasn't AI? After all, everything computers do outside AI is done pursuant to knowable, describable human control, no different from pressing keys on a keyboard.
So if you didn't mean AI, I think it's worse for your argument, not better.
I think it's better for my argument, not worse.
The difference is that I will actually explain what I mean instead of just making claims with no evidence.
Can you explain what distinction you meant
The distinction is that the computers making millions of trades per second are owned by few people and have a huge advantage. They don't lose money and they don't hold anything.
They aren't wanted by actual people making decisions, they are there in spite of what traders buying stocks to own them actually want. They are there because they make money and from the exchange and make money for the exchange.
Retail traders are the product even though they don't want to be.
It's pretty funny that there are people in this thread pretending like "price discovery" is a real thing that happens in markets based on information. We've all seen Dogecoin and BBBYQ. The emperor has no clothes.
We could make the distinction between price discovery, i.e. what price are people currently willing to buy and sell at (short-term) vs value discovery (long-term).
In the short term the market is a blockchain-enabled voting machine but in the long term it's an Elon Musk tweet-weighing machine.
When I press the buy and sell button, I want the transaction to happen as quickly as possible. So does everyone else.
My millionth of a second is different than yours, and everyone else’s.
It is no different than buying or selling anything else. And there is no loss from the additional liquidity, you can easily set a limit at which you want to buy or sell.
> My millionth of a second is different than yours, and everyone else’s.
No it isn't.
> I want the transaction to happen as quickly as possible. So does everyone else.
Your monitor refresh is about 16,000 times slower so you aren't going to know.
The only reason you need something faster is because you think you have to compete with other people trading on microseconds.
If matches happened at 1 second intervals you wouldn't have to worry about it at all.
> If matches happened at 1 second intervals you wouldn't have to worry about it at all
This is nonsense. There is still advantage to submitting your trade as close to that settlement deadline as possible.
Not so much if the submitted prices are hidden until the matches are resolved.
> Not so much if the submitted prices are hidden until the matches are resolved
Except every other exchange is still revolving. The only way to implement this is to eliminate competition between exchanges.
Also, Wall Street would love this. The more of the order book you submitted, the more information you have about its composition.
The only way to implement this is to eliminate competition between exchanges.
There are two different things being talked about here.
Trading based on arbitrage between exchanges will happen in one way or another no matter what.
Trading millions of times per second automatically on the same exchange when some people have low latency computers at the exchange with huge amounts of extra information is not necessary.
Also, Wall Street would love this. The more of the order book you submitted, the more information you have about its composition.
The point isn't to make something 'wall street hates' it's to make something that doesn't get money eaten away by automated computers in the middle so that it's the best option for people making trading decisions on people time scales.
> The point isn't to make something 'wall street hates' it's to make something that doesn't get money eaten away by automated computers in the middle so that it's the best option for people making trading decisions on people time scales.
Why is this desirable? It seems like an argument designed only to serve the interests of a small class of person who insists on doing manual trades themselves.
The rest of what you've written just sounds like "I lost money because computers are better than me at the task." I'm not sympathetic to that concern. Computers are better than me at lots of things, so I just don't try to compete at those things. I pay people with access to the computers to do them for me, and then I focus on the things I'm good at instead. Division of labor and all that.
Anyone who isn't involved in HFT should be in favor of rules that slow down trades to human time scales. HFT currently favors a small class of rich people.
> Anyone who isn't involved in HFT should be in favor of rules that slow down trades to human time scales
What are you basing this on?
I’m a former algorithmic market maker. Every plan to “slow down trades to human time scales” I’ve seen were trivially gameable. They were always proposed by a group of concerned citizens, and then jumped on by my bosses, because if the market is slowed down to pre-HFT speeds, Wall Street can make pre-HFT profits on risk-free trading again.
Do you think the internet would work better if we forcibly increased latency? If we did, if the argument were this would flatten the market and better let small websites compete with CDNs, do you think that would actually happen? Google and Cloudflare would say “oh well,” and disassemble their servers?
Our markets have structural problems. They are mostly solvable. HFT is none of them, which is why you keep hearing about it from folks who don’t want reform.
I feel like all of these points beg us to loop around and ask the question : "How does HFT provide social benefit to the world at large?"
the exchanges weren't established for the abstract sake of money, they were established to provide benefit to people.
Does HFT still do this overall, or is it for the benefit of a small in-group of elite? Why is that favorable? Because we nobodies can buy the ETF?
> "How does HFT provide social benefit to the world at large?"
It's explained multiple times in this very discussion. It's not our fault if you refuse to read them. But the most straightforward and obvious way is that it injects liquidity into the market, making it easier to sell when you need to liquidate. (It also reduces volatility overall, another good thing.)
> > the exchanges weren't established for the abstract sake of money, they were established to provide benefit to people.
Snort. The exchanges were established by wealthy people, for wealthy people, to engage in business with other wealthy people.
The NYSE was established in 1792. Is it your contention that anyone except the elites were buying and selling stocks in 1792? Let alone all the exchanges that pre-date the NYSE. The Amsterdam Stock Exchange was set up in the 1600s specifically to facilitate the buying and selling of Dutch East India Company shares. Was Farmer Aardhuis buying shares? Or aristocrats and royalty?
I suspect the root argument is really against the efficacy of markets and capitalism as a useful system for humanity, in which case I say that is a fair debate. The benefits are hardly obvious today.
> point isn't to make something 'wall street hates' it's to make something that doesn't get money eaten away by automated computers
Wall Street lobbies to ban HFT because HFT’s computers eat away less than traditional dealers would.
Retail investors railing against HFTs are sort of like those San Francisco types who protest new development to the benefit of their landlords.
Retail investors railing against HFTs are sort of like those San Francisco types who protest new development to the benefit of their landlords.
It's nothing like that since there isn't a limited resource and everyone has access to the core purpose, which is to trade stocks.
What I notice with these discussions is that no one can actually explain why a retail investor or anyone would want computers trading underneath them millions of times a second.
At best they try to give hft credit for the automation that happened with computers anyway.
The only people that want it are the people doing it. That's not a business, that's a grift.
Does one of the following traditions inform your view on this issue?
a) https://www.sefaria.org/Bava_Batra.90b.1?lang=bi&with=Introd...
b) https://sunnah.com/nasai/44
I have no idea what this comment you are copy and pasting is supposed to mean, but if you want to confront what I actually wrote, feel free.
This comment makes no sense at all.
>When I press the buy and sell button, I want the transaction to happen as quickly as possible. So does everyone else.
Nope, not me. I don't mind if it takes like 20 seconds or so.
> not me. I don't mind if it takes like 20 seconds or so
Which is fine! You can probably find a broker who will give you fee-free trading with that preference. The price you execute at won’t be as good. But unless you’re trading millions, that’s probably fine.
So, you want everyone to trade only daily or weekly or quarterly?
The same time frames that existed when humans manually traded.
Do you only want us to get our news once daily via a physically printed and distributed newspaper? That’s the timeframe that we used to use for news updates. If not (I.e., you’re in favor of keeping the Internet), how would you reconcile the asymmetry between trading and news updates? If there is a disparity between these timescales, you end up with markets gapping hugely every time they open. This just increases risk and volatility. Yes, markets do this overnight today, but 24-hour markets don’t do this as much and they allow a trader to set stop orders that are active overnight to protect positions. So, for instance, futures markets will gap over a weekend break, but because they trade 23 hours per day during the week, they are much more smooth than they would otherwise be. Compare gaps in ES SPX futures contracts vs. gaps in the SPX itself, for instance. In general, smoother is better for everyone.
Humans do still manually trade. The existence of HFTs doesn't prevent or interfere with that, in fact it makes it easier by ensuring that prices are more likely to be converged to a consensus market price at any given millisecond.
Thinks of it like this. When I put in a trade at human speeds based on business fundamentals, I'm not looking that the millisecond by millisecond prices, I just put in a price I am willing to accept and if the market reaches that price I get execution. HFT makes that easier and more efficient across markets by ensuring prices are converged rapidly.
How do you think it makes it harder or worse? If I put in an order to buy at $x on a particular market because I think the stock is worth more than that for business reasons, what is it about the existence of HFT that is a problem for me?
Participating in the market certainly used to be more expensive. I'm not sure regressing to this is... A good thing?
Every few seconds is fine.
Disagree? You think milliseconds is “better” somehow?
Then by that logic microseconds are better still! (A straight-faced argument made by thousands of HFT people.)
Then, surely, nanoseconds matter. Again, some traders care deeply about shaving single digit “nanos” off their response times by using smart NICs that can respond before the incoming packet has even finished arriving! Bypassing the CPU entirely because ermahgerd that would waste precious nanos!
Okay, what about femtoseconds? Attoseconds? Low single digit Plank time units?
Clearly the extrapolation is nonsense.
The problem is that there’s always an advantage to some rent-seeker to be faster than everyone else, so there will never be consensus between them and the general public. Or each other.
It’s a classic tragedy of the commons.
This is why laws are required, to prevent that one greedy guy putting “just one more cow” onto the pasture than the other greedy guys.
This is the “speculation is bad” take with a side of naïveté about how markets work.
Open an order book. Prices and quantities aren’t decoration; they’re live telemetry for supply, demand, and how tight the crowd’s consensus is at each level. That’s information, full stop.
A human (or machine) trader forms a view of fair value against that tape. The book helps decide how to trade—size, urgency, venue—regardless of motive: arbitrage, hedge, speculation, investment, cash-out. Intent doesn’t change the math.
Prints are messages. Every execution updates everyone else’s priors. More prints → more information → smoother discovery.
Make the book sparse—only a handful of trades per day—and watch confidence collapse. With weaker consensus and wider error bars, people step back. Liquidity thins, friction rises. That’s not morality; that’s microstructure.
Time horizon doesn’t invalidate the signal. A strategy that unfolds over days and one that resolves in milliseconds both add to the dataset. If it trades, it teaches. More resolution in others’ behavior means better prices and deeper books. That’s the game.
Millisecond trading strategies have zero relationship to information about companies or economic fundamentals and are therfore not economically productive. They're exploiting microstructure inefficiencies like latency arbitrage, order front-running, not price discovery. That's not 'teaching' the market it's a tax on everyone else's execution. The fact that it's legal doesn't make it structurally useful. It is just a result of the rules not being updated when trading became automated at superhuman speeds
> Millisecond trading strategies have zero relationship to information about companies or economic fundamentals and are therfore not economically productive
It is not clear to me that the only economically productive information is "information about companies or economic fundamentals."
If I know some idiot is willing to pay 100x what a company is actually worth, that is economically productive because it gives me, someone better with money, a ton of resources that formerly were controlled by someone who didn't know how to leverage the assets in an economically productive manner. IT's the same argument as allowing adverse possession: transfer of assets from non-productive owners to productive owners, benefiting society as a whole.
With this, I've established a third kind of data beyond "economic fundamentals" and "information about companies."
Right. “Worth” and “price” are relative notions that are only useful when paired with a point of view. What’s your house “worth?” You might have a number in your head, but unless you have a buyer willing to transact at that price, your house isn’t worth what you think it is. And this relates to economically productive information. Your house might also be worth more if one knows that there is gold or oil buried underneath. It might make more economic sense to bulldoze the house and start mining or drilling.
I'm not sure what your comment has to do with HFT
This is one of the best comments I've seen on HN.
So, seconds good but milliseconds bad? That seems rather arbitrary.
The boundary is "arbitrary", but clearly there has to be one, otherwise we're all nodding in agreement as trading speed heads inexorably towards Plank time units.
We have some convenient "lines in the sand" that we can use as a guide:
- To make trading fair globally, the round-trip time for light around the planet could be multiplied a couple of times. That's about a second.
- The fastest possible time a human can parse the meaning of a long headline (not the full news article!) is... about a second.
- Nobody in their right mind should be buying any significant volume of shares without double-checking their order. There's no way to do this even vaguely carefully in under... a second.
Etc...
Bots trading faster than a second are trading with each other, and the only signals they have are each other.
Humans are what markets are for, not bots.
This reminds me of a story from WWII where a bunch of generals took a holiday at the same time, leaving a junior general in charge. He was in a bit of a panic because he was expecting to be overloaded with work... but found it easy. The generals were making work for each other by requesting reports, organising meetings with each other, etc...
Bots make work for bots, they generate signals for bots ever faster, to be processed by faster bots still, etc...
It's just... nonsense. Zero real information is being generated, they're just "riffing" off of the much less frequent human-initiated trades, all of which take minutes to organise and execute with due diligence.
It's like being asked to write a 10-page essay on a three-line poem.
Which tradition inspires your view...
a) https://www.sefaria.org/Bava_Batra.90b.1?lang=bi&with=Introd...
b) https://sunnah.com/nasai/44
You have posted this nonsensical comment 3 times.
And you keep incessantly posting about the moral evils of speculation which is only tangentially related to the Texas Stock Exchange. I guess morality policing makes your comments better?
HFT is not the same thing as speculation.
Which moral doctrines/strictures do you think it violates?
Basic fairness
The only non-arbitrary boundary is the one set by physics. Everything else is arbitrary. There are ways to greatly reduce front-running of orders, but that actually is an orthogonal issue to HFT and microstructure level trading.
Limiting trading to human reaction times is much less arbitrary than what we are doing now.
Seems like an arbitrary comment.
hah someone finally said it. The financial market or whatever the f it's called has become a Monty Python sketch. Like those "pro" StarCraft gamers that keep randomly clicking their mouse for no reason except to keep their APM counter high.
Notice how no one actually has a good reason for why shares should be bought and sold in milliseconds?
It's exhausting to see good reasons offered and then y'all proudly failing to understand those reasons. Like, there are literally multiple comments here explaining it.
If I have a condition that is resolved by standing upside down on my head, and I invent a 100 ways to balance my body on my head and explain the reasons for each of them, it doesn't mean that standing on my head is a good or sensible thing to do. And none of them address the core problem that is the condition that requires me to stand on my head.
Look at why shares and the stock market were created in the place, and how many layers we laid on top of them and made the means the end and the purpose. If it takes you more than 2-3 sentences to explain something that's purely invented by humans it was probably silly to begin with.
Like the other day I was just watching a video about UTF-8. It spent a good chunk explaining all its various quirks and rules and workaround that all went back to how ASCII was dumb in some of its choices in the first place and now we're stuck with that forever.
> If it takes you more than 2-3 sentences to explain something that's purely invented by humans it was probably silly to begin with.
Lol now apply this to medicine, surgery, physics, and computation next. You're using a "tree" to store data? Explain that in 2-3 sentences.
heh I thought of that while writing the comment, but I think I covered it with "something that's purely invented by humans" which finance definitely is, unlike medicine, surgery, physics, and to a lesser degree, computing.
About the only good justification you have is HFT increases liquidity but that is not good enough for all the wealth HFT extracts from the market.
Wait until you hear about how much wealth Salomon Bros extracted from the market.
Finance is full of parasites. HFT firms are just some of them.
But well, you see, the mArKeT..
and lIqUiDiTy!
Except for the fact that people don’t know what the price is even with all available knowledge. HFTs serve a pretty useful function in converging to a discovered price the market can bear continuously. Prior to HFT markets were generally less stable on their pricing and liquidity was much worse. The fact you can basically trade at any time on anything instantly is made possible by HFT.
I look at them as providing a service like an energy exchange does in ensuring power distributes evenly and regularly across a region across providers and grids. They clip a fee in the middle but they provide a service in stable supply and prices.
This doesn’t mean automation isn’t without risk, and like an energy exchange, when things go badly they can go very badly. But by and large you never notice either the HFT or the energy exchange while you benefit from their existence.
The fact that people make money off of HFT by definition means that the market conditions have changed in those time frames.
No, it is proof that they are parasitically extracting money via non-productive strategies like latency arbitrage and order front-running.
Liquidity provision is valuable though, and it's not really parasitic to exploit inefficiencies, it's not even that profitable a strategy today.
It isn't nearly valuable enough to compensate for the wealth HFT extracts from the market.
Which is changing market conditions.
> He points out that most trades are done in the last hour, so really trading only needs to occur once a day.
Presumably then the last trader has the most information, and so the game would be getting the info as late as possible and trading as late as possible, but not too late.
That's one thing that will make blockchain trading interesting as it's discreet block by block, such as the ex-dividend date who holds a stock when the dividends are paid, might make fees for that block very competitive. The SEC is really struggling now with good regulation but it's coming end of the year to draw the line in the sand.
I was going to make the old joke about discrete vs discreet but I suppose that blockchain trading is both.
throw in discreate as well :)
> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading.
What would that look like? Periodic auctions? Certainly it could be done, I'm just trying to understand what problem might be solved, and whether the solution would be effective.
For example, even with the opening and closing auctions we have today, there can be an advantage to getting your order accepted right before the deadline. Some participants do this, most don't really (depending on the exact definition of "right before"). But the fact that some do tells me that some participants would do the same thing with periodic auctions, and at least for them latency would still be important.
If, as seems likely, latency is fundamentally important to at least some styles of trading, how do you incentivize participants to not value it?
You take bids continuously but publish the bids and "resolve" the auction every X seconds, where X is between 5 and 10. Then there is no speed advantage as long as you can get your bid in within 5 seconds.
There is still a speed advantage. You can look at correlated markets for example and trade at the end of the time window with 5 seconds more info than anyone trading at the start of the time window.
Except with the randomness you won't know if the window is 5 seconds or 10 or anything in between. So sure you could send in your bit at 4.99 seconds but it won't matter if you're a few microseconds off.
One option is to add a random delay to every trade, thus making high speed arbitrage substantially more difficult.
I suspect that randomness of some sort is the only way. Without that, whatever the rules of the game, there is a way to somehow get a slim advantage. You can make the advantage small and the costs to try to gain it large, such that it isn’t cost effective to try, but as we’ve seen with HFT, it’s amazing how much people will spend to pick up pennies. Even a tiny gain, exploited frequently enough can be quite profitable.
> random delay
A Poison process. Just specify the expected value. E.g., if the expected value is 5 seconds and have gone some hours without an event, then the expected time is still 5 seconds.
E.g., like the time to some radio active delay and whatever its expected value to decay is.
Or even a fixed delay. Imagine trading with one month delay - You'd have to bid what you think the stock is actually worth, not what you think everyone else will think it's worth in five milliseconds. That's extreme, of course.
Another is to reset the clock on the auction each change
Eric Ries first started talking about a Long-Term Stock Exchange, he suggested long (potentially multi-year) lock-up periods. The LTSE he actually implemented doesn't have that. I speculate that this was a compromised because they are allowing dual listings which helps them gain market share but also would undermine the entire concept of very long lock-ups.
I'd love to see a stock market actually do this.
You could force companies to provide standing orders to sell unlimited shares at a price selected when they go public, and one they're unlikely to go below.
This would happily also eliminate price speculation entirely. The price would just be whatever the price is and most returns would come from dividends. Would require a bunch of tax and regulatory changes
> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading
Wall Street (as in the sell side) is strongly incentivised to stamp out high-speed trading. It undercuts their dealer model. They have tried and failed to come up with an auction model that eliminates HFT without tradeoffs that real investors find unacceptable.
Didn't HFT compete itself out of outsized profitability years ago? So now we get instant super liquidity for pennies?
For stocks most likely, though I assume a lot of it today comes from options traders, where the spread is much wider.
> Didn't HFT compete itself out of outsized profitability years ago?
No
> So now we get instant super liquidity for pennies?
Not pennies yet. Still dime and quarter range.
Last I checked, the spread on SPY is on the order of <1 basis point.
IEX tried this to much fanfare. Turns out most participants don’t particularly care about that as a motivating factor.
I'd say IEX has done remarkably well - it's not likely to displace NASDAQ or NYSE but it has solidified its place as the #3 US exchange by any reasonable measure. If TXSE achieves comparable market share I'd call that a wild success.
You're not wrong to say that most participants don't care about what IEX offers, but enough do to make a meaningful dent in trading volume.
It’s definitely not 3rd place. That’s cboe and it’s not close. It’s hanging around with ~2% of the trade volume.
https://www.cboe.com/us/equities/market_statistics/
I don’t know if that is “remarkably well” but it certainly isn’t some market paradigm shift.
If you were to tell me in 10 years the Texas exchange would have 2% of the market I’d believe you. But I’d still not be terribly impressed.
IEX is "3rd place" in their mind only because the other 12 exchanges are owned by two companies. IEX is 13/13 for volume, and the main reason they have any volume is because IEX sometimes has the NBBO so you have to trade there per reg NMS.
You're right, my view is way out of date. I didn't realize CBOE had grown so much in straight equities trading. IEX is the best of the rest, but it's NYSE, NASDAQ and (to my surprise) CBOE as the clear top 3.
> #3 US exchange by any reasonable measure
According to their stats, they are usually around 3% of the market:
https://iextrading.com/stats/
Cboe miax and memx are all doing better than IEX
That’s what always surprises me when folks bring this up. Nobody in the market cares. Institutional investor experience some of the lowest trading cost in history. These complaints are most often coming from retail traders where again I don’t follow the argument. Instead of some guy on the floor picking up dollars with have machines picking up pennies. This is a win for everyone.
Nobody in the market cares because everyone in the market are cheaters. There is a huge untapped potential of people outside the current market that do not participate because they know the market is rigged against them.
A fair market could be huge, but the trick is keeping it fair. It used to be more fair, and we used to have a healthier economy because of it.
It’s not like most of the unfairness in the current market couldn’t be dealt with, probably with laws already on the books. Most HFT strategies are not only blatantly dishonest but also clearly illegal. The government looks the other way though, because corruption.
Hyperbole, hyperbole, hyperbole. Define more fair. Spreads are some of the lowest they have been in history.
> Most HFT strategies are not only blatantly dishonest but also clearly illegal.
What specific strategies are you referring to? Genuinely curious.
> > Most HFT strategies are not only blatantly dishonest but also clearly illegal.
> What specific strategies are you referring to? Genuinely curious.
Any strategy that outperforms his 10-20% passive index fund VTI/QQQ ETF.
HFT is pulling 50-100% annual returns for decades.
HFT is capacity constrained, yes. But anyone would take 100% return every year on “only” $100 million on deployed capital.
Where is the citation for this 100% HFT? Lots of numbers floating around but the only time I have seen those types of numbers are for short lived periods.
My issue as always with these numbers is that back in the day you had some bloke on the floor vacuuming up this wide spreads and today we have some of the smallest spreads in history. It has a cost but that cost is generally less than what you were paying before.
Why would you create arbitrage opportunities for no reason? That’s the only thing that would happen I can see from an exchange that can’t keep up with the NBBO price, which you are obligated by law to quote regardless.
People in the finance industry will arb between digital and human markets and net a profit from it. It seems pointless to me, but perhaps I’m not fully grasping what that would do.
If trades were batch processed say every 5 seconds, and randomized in the case of ties would that solve the fastest connection issue?
Also it just changes the nature of the game. There's no incentive to interact with the batch until the absolute last microsecond. It will still be dominated by latency-sensitive participants, just in a manner where the difference between visible liquidity and latent liquidity is even more diverged from reality (on average).
IIUC being fast is not as much of a problem as dropping in a bid and cancelling it at the last moment
Bit of an aside, but I really do not understand the concerns with trading speed.
I can trade at human speed now: when I want to make a trade, I put in the order and it gets executed. Speed elsewhere in the market makes it easier, not harder, for me to trade when I want to. And I don’t care who my counterparty is; that’s a fundamental feature of a stock exchange. If A is always faster than B because A is 2 racks closer to my broker in the data center… so what? How does that hurt me? Good for A.
A computer-powered trading strategy can react faster than me to news—true. But that’s fine because I don’t have to follow a breaking-news investing strategy. There are tons of others, many of which have proven to work very well.
>How does that hurt me?
Because lit orders get front run. Every sophisticated participant/algo is exceptionally efficient at extracting money from less sophisticated participants.
As someone who trades decent volume but doesn't have a fully institutional grade workflow, I have the fortune of dealing with this...
Simple lit orders (posting an order directly to an exchange) will be taking advantage of by both market makers, by HFTs, and by smarter execution algorithms. The algorithms running the bids and asks will widen spreads. Sell orders will peg to one cent below your ask, and if flows start to reverse, they will pull their liquidity and the slower participants get their liquidity swept through (adverse selection).
The next step up is to use something like a midpoint algorithm or hidden order, but hidden orders will be pinged with one share from the robots and you will get sniffed out and positioned against. If they detect size in a midpoint algorithm, the liquidity in the opposite direction will evaporate, and they will "walk" the dumb midpoint algorithm down, take the liquidity, and then reset the mid back to where it was. The list goes on. It's generally an awful environment for "regular" participants.
Moving on from simple improvements available to the more advanced retail space like midpoint algorithms and VWAP algorithms, you have algo routes that are explicitly designed to take advantage of the "lesser" order types. If they are in a position to get a fair fill, they will rest the order in case they see a situation they can take advantage of, and only take mid fill if the outlook deteriorates (this is all millisecond time frame stuff, but the orders will be worked in an automated fashion throughout the day - time frame is configurable).
On the more developed institutional side, liquidity is sourced in dark venues designed to ward off HFTs and front-running, or sourced in fair flash-auctions which are again designed to ward off hfts and information leakage from the auction spawner.
So the argument would be that perhaps the modern developments like batched flash auctions should just be the new baseline, and designed so that all of the participants feeding into them get an equivalent quality of fill.
These "phenomena" are fairly significant. Let's say you have a 100k position in a smaller cap stock. You may move the stock down a few percent if you start walking down your order and it becomes clear that you are looking to take liquidity. Vs 100k in one of the more advanced order routes where you're basically going to get filled near mid. And of course it goes without saying that 100k won't even move the needle in the institutional routes.
For a while I got so sick of it that if I was looking to buy back my short options (the same things happen in the option space, but with more slippage), I would stuff a basic midpoint algorithm on the underlying, it would be sniffed out and liquidity would evaporate, price would fall, and I'd slam the ask to buy/cover my short calls on the price drop. At least I could get a fair fill when I played two different areas of the market complex against each other... It's just a pain. To the average participant, they will find that liquidity is there when it suits the counterparty, yet not there when they need it.
NBBO/best bid offer itself can be illusory. There are many situations where if you sweep the bid, you will get a fair fill, but I'd you just hit the bid price, you will essentially take off the very small front order of an iceberg order, they will run their calculations, and the liquidity pegs a cent below you if it suits them. That's how it works.
This goes for all areas of the financial market, including the bond market itself, and it contributes to systemic fragility in addition to harvesting retail money.
Granted, almost no retail participant is actually shipping orders directly to exchanges like I laid out. They are going to payment for order flow routes. These are actually fairly efficient, but again, remember that if you are posting a bid or ask, exchanges pay you (yes, you actually net money, albeit small) to post these orders, and anyone feeding into PFOF routes is getting this income taken from them. The frontrunning risk in the payment for order flow routes is also much more severe, since your order is getting blasted out in all directions before it is posted. So when those sorts of routes go wrong for retail traders (ex making the mistake of posting a large order during a major market event), they're could catastrophically get screwed.
It's also worth noting that retail does have access to a relatively Fair auction system though. Open and closing auctions are probably the best ways to fill orders. Just be careful not to ship too much size into them since a large enough net imbalance (say in a small cap stock) in a closing auction will have the same "walk down the price" effect that happens with midpoint orders.
Personally I think that the institutional flash auctions are pretty neat. For my understanding this sort of liquidity sourcing is growing. I would think that this sort of functionality could be regulated and integrated into the base level market venues.
> lit orders get front run. Every sophisticated participant/algo is exceptionally efficient at extracting money from less sophisticated participants
Anyone executing via lit orders is either forced to do so or an idiot. That’s why most of the market doesn’t execute via lit orders. Which is fine. The trade is still reported ex post facto, and the inefficiencies this creates are always less than the convoluted auction formats one must use to make low latency non-advantageous.
On net I'd agree, with the caveat that the hyper speed liquidity comes at the cost of fragility. Liquidity that can disappear in a microsecond can and does amplify market shocks.
As for retail execution, while on net there's a standard and strong argument that a less regulated market is the most efficient, retail execution is most definitely at the bottom of the totem pole, with an order shopped around to parties that can pick and choose the profitable orders before it is sent to wider liquidity pools. I think that this side of the debate is more about evening out the playing field. On net the market may get less efficient, while slower speed participants have an improved experience. These aren't contradictory.
> while slower speed participants have an improved experience
Wall Street lobbies to ban HFT every few years, hoping people who don’t like how it looks will back them up.
Slower participants in equities are block traders. Folks moving hundreds of millions if not billions at a time. Large institutional investors. Dealers. Retail, on the other hand, would get hosed, though it would also become much more profitable to execute, so maybe that brings some service perks for larger retail traders.
I gotta say.. I'm way out of my depth on that one. As a guy who's mostly put some 401K $$ into index funds, and has the odd RSU/ESPP stock to sell - will any of these be an issue when I sell some of them later? I've only sold ESPP stock via "at this price" when I had a large enough number, and "at market" when not - but it's been in the hundreds of shares at most. May have a few thousand shares of my current employer's stock to sell next year - will this affect me?
No, it will not affect you. The above post is mostly correct, but it's misleading because it's from the perspective of a trader trying to make short term profits. But most of us are considered investors, we periodically buy/sell low volume of liquid ETF/funds/stocks and hold our positions for years. Market makers do collect a tiny premium for every trade, but it's irrelevant for the time horizon that investors are concerned with.
It may affect them. I stand by that.
Since this is hackernews, I'd imagine there are a decent amount of people with low float tech stocks. Those things can be impressively squirrely. I've moved a billion dollar company 5% with a $100,000 order by being a klutz.
Granted, these situations are usually in times of market stress, but these are times when for better or for worse people do need to raise personal cash on occasion.
It depends on how thinly traded the stock is. Unless it's very thinly traded or you trade it after hours you'll almost certainly be completely fine. Like if you're talking about something heavily traded like a FAANG, you could probably dump several thousand shares pretty much any time during regular trading hours and have little or no effect on the price. Certainly not enough to be worth caring about for a one time transaction. OTOH if you're running some trading algo that does that kind of transaction thousands of times a day (or more) every day, then that would be a very different story.
Yes, it may! Assuming you are talking about at least a mid five figure position in a non MAG7 class sized stock, if you post the order directly to an exchange, that's enough to shuffle around the level 2 order book (obviously not in your favor).
By doing so you have completely identified yourself as non- informed, slow human flow. Ex: if you are looking to sell, it's blindingly obvious that the next likely move from you will be to lower the asking price. Even human traders will be a able to take advantage of that situation as a bread and butter trade.
One important aspect is that a lot of this is in terms of opportunity cost and risk. If you are posting the order at a "bad" time (let's say market makers are not long inventory and looking for liquidity), that's when one should expect front-running style action, as they want liquidity ahead of you. Likewise, if you're hanging out there and a market blip in the sector or in the depths of the market complex moves against you, you will get filled and "miss out" on the higher price that the price will settle at. And while you may think they don't care about a 50k order, these robots are hyper optimized and will have had PhDs and 9 figure plus data and infrastructure costs explicitly designed to capture every cent. That's why it's so obnoxious... It's not just market makers either. I know of a prop shop trade that involves harvesting rebates on trending stocks (stuffing the ask and amplifying the trend while receiving credits... if you've looked at stock charts you may have seen a seesaw pattern of liquidity exploration), and if you step into an active trade like that no doubt there will be at least some basic conditional logic to take advantage of stale liquidity.
I walk my very non-tech mother through manual executions on occasion. She finds it very funny that I can see her order, and without prompting has commented about how annoying the little game is.
Numbers - Let's say it's a 50 dollar stock that doesn't get a ton of volume. Most stocks are surprisingly illiquid. Which makes sense because of course nobody wants to deal with HFTs. The lit order book is almost a reference price for the actual trading that happens behind the scenes (midfills at dark venues, etc). Wouldn't surprise me at all to see 10 cents of additional slippage. That's $100. Also wouldn't shock me to see more if it's a smaller stock. Of course it's also fairly common for there to be midpoint liquidity right there for you to take. It just depends on the positioning of each of the participants, and a retail trader is at a distinct information disadvantage.
That said, it's highly unlikely that your 401k is at a DMA (direct market access) broker. Your order is probably first going to go to an internalizer (crossed with other customers), and then flashed to prop firms who will have the ability to take your order (and if they do it probably technically means that you've missed some money somewhere, although it may be in any number of obscure areas), and finally you're going to get sent to the market and pools of liquidity via a decent execution engine. On net, these routes don't work out that badly for retail participants.
Also, if you're talking a highly liquid ETF like S&P or Qs, don't worry about it. Just hit the bid.
That said, I would recommend upgrading if you can. Use a midpoint order type, split your order into chunks, spread it out time-wise a bit. Market On Open and Market On Close order types are also widely available at better retail brokers. I think that these are the most fair fills you can get. Split it 50/50 between open and closing auction. It's just a drop-down order type selector, and you can queue for the auction when you set up the order (say, early morning before the day starts) and walk away for the day and come back to filled orders.
Don't use market orders outside of the huge indexes and megacaps. You're guaranteed a bad fill, and then you also run the tiny risk of a truly awful fill (if something happens machine speed before you can blink... been there done that).
Market On Close / Market On Open orders are really easy to use. Brokers like Schwab and Fidelity and interactive brokers will support them. More people should use them. You'll be getting fair fills side by side with smart money.
Thanks. It sounds you are talking about mostly market-rate sell orders? I tend to use limit type orders to sell at a price I'm happy with. Usually right near what the stock is currently hovering around. I.e. if it's hovering between $50 and $51, I'll put in a limit order for $50.85 and hopefully get someone to take it. Sure, I might have been able to get $50.95, but I might have also gotten $50.25 with a market-rate order. Am I doing it wrong?
Theoretically, when the market offers me an order book and I take offers on one or the other side that should be totally fair? I think until execution/fill the information should be totally between me and the exchange and no one else, right? I get that if I send a limit order that can not be filled, that that affects the market because new information is introduced (before the trade) but in the previously described case all the information going out should be after the trade already happened, right?
Sure, if you want to cross the spread you can usually get a clean fill in exchange for a bit more cost. That said, a fair price is fairly synonymous with a midpoint fill, and if you have a proper execution route you can get the ask (smart algo peg orders for example).
There is a caveat though, which is that top-of-book liquidity is increasingly thin every year. It doesn't take that much size to hit the bid, take out the first thin onion layer of liquidity, and have the spread widen away from you. If you look at the live order book depth you will see that the top of book is often thin and flittering. The deeper liquidity will react to the top levels getting cleared before you can blink. (That's why if you have a non-small order and want the bid price, sweep the bid and go a few cents under, you will get a much more reliable fill and won't be left hanging with the liquidity instantly repositioned a sub-penny below you).
I'm generally of the view that the more freedom in trading the better, but there is a concern on these ultra-high-speed trades that it ultimately prioritizes only certain blessed traders, those with expensive equipment, geographical proximity, and approved partnerships.
I've thought that one fairly neutral fix would be to add a random delay to the execution time of each trade. It could be very small... like between 0 to 1 seconds. Just enough to negate the 'all or nothing' prioritizing of a slightly faster connection.
> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading.
Benefits of high-frequency trading:
- Increased liquidity: improves market liquidity by ensuring there are always buyers and sellers
- Tighter bid-ask spreads: High-volume trading can narrow the spread between buying and selling prices, which can lower costs for investor
- Efficient price discovery: By reacting instantly to news and other data, HFT can help incorporate new information into a stock's price more quickly.
> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading.
What would that model look like?
Suppose we trade infrequently but take orders whenever. A trade is coming up and the order book looks like this:
We can always fill the buy order for 100 shares. How much should that guy pay?I suppose you could but the problem is that the liquidity would be either shit or more charitably very different to other exchanges that already do what they're supposed to do.
Just make all positions irrevocable for at least 10 seconds after posting.
> Just make all positions irrevocable for at least 10 seconds after posting
Sounds great for Wall Street. Spreads would necessarily widen as people buffer out. Meanwhile, you’ve turned every lit order into a 10-second option for market participants. Which means there is still a latency advantage to lifting or hitting a standing order first.
only if you make those bids visible. the bids are held in a buffer and at the end of the buffer, it either completes a trade or appears on the order book. iirc some market tried to do this with a literal loop with a physical latency.
> only if you make those bids visible. the bids are held in a buffer and at the end of the buffer
Everyone else's bids are invisible. The ones you submit--for your self and for your customers--are not. The larger a brokerage operation you run, the more of an edge you get under this system.
We created the unified tape and passed Rule NMS specifically to remove these incentives.
One interesting approach to this is the gas auction system in DeFi where (on Ethereum) traders bid to have their trades included first in a block, and that additional payment is burned / accretive to ETH holders. Though that turns "fastest connection" into "highest bidder" advantage.
Another approach that Aztec and some others are taking is to shield all transactions with zkSNARKs such that the intent of a transaction isn't known until it's completed. Combined with deterministic block times you could force random ordering of transactions in batches, effectively mitigating the fastest connection OR highest bidder advantage.
The real question is whether we even need stock exchange organizations if we can do it all on chain without them. I think the only thing you really need is someone to handle the stock ownership credentials in the event that legal action require involuntary transfers, that sort of thing. That could be a much smaller footprint organization, I think.
That's the promise of tokenized securities! Securitize + BlackRock are trying to make that happen. This should remove a lot of middlemen to the trading and settlement process.
They could buffer a 2 second window and randomise the orders of the transactions.
And Australian companies often list in the US.
why would they do that? the system is designed to reward asymmetry.
"Most trades" doesn't necessarily mean "most profitable trades" ;)
From: https://www.txse.com/trading-membership
> TXSE’s primary matching engine is located in Equinix NY6 in Secaucus, NJ, with latency equalization across NY4, NY5, and NY6. Customers outside these buildings will experience additional latency. The disaster recovery (DR) matching engine is hosted in Equinix DA11 in Dallas, TX.
> Customers may connect to DR either directly to DA11 or through TXSE infrastructure at 350 E. Cermak in Chicago. Cermak connections will have traffic backhauled to DA11 over redundant TXSE circuits. Backhaul from Cermak to the production data center is not available.
If anything they will build a backup DC in Texas so they can hold that over NJ in case the local government starts talking about transaction taxes again. The CME is currently building a “backup” private Google Cloud datacenter in Dallas.
> The CME is currently building a “backup” private Google Cloud datacenter in Dallas.
This has been “in progress” for over 5 years now.
Probably doesn't ever need to be completed, just in the works as a reminder every time the aforementioned taxes are floated as an idea
I would rather see an exchange that requires buyers to hold their shares for at least x days or weeks, and slow everything way down so that people are actually forced to make decisions based on fundamentals rather than trading based on jitters in market movement. Then the datacenter location is almost irrelevant.
Who is that a value proposition for? Will they pay for it? How?
This is one of those ideas that actually makes zero sense. It's why the "long term stock exchange" has failed so miserably.
You can construct a synthetic long or short position with options [0], so those would need to be removed as well. Options are much too useful for market participants (market makers in particular), so your idea is dead in the water.
[0] For US equity options, if you sell a put and simultaneously buy a call at the same strike price, you have a synthetic long that acts like owning 100 shares of the underlying asset (no dividends, but that’s already priced in to the options).
Buy a put and simultaneously sell a call at the same strike price and you have a synthetic short that acts like being short 100 shares of the underlying asset.
The proposal is because I don't think a bunch of people playing games with money provide any sort of value. If you could only buy a valuable company in such a way that options and HFT trades were excluded, then you would just have to invest in the company and support its growth. That is the goal of the structure. I completely agree with you: If the bloodsuckers don't have to do so, they never will. I would prefer it were law, but second best would be a place where companies could opt out of the anti-culture of wall street and still be publicly traded.
You don't want that unless you want to wait days to trade.
That is the point. So much stock market activity is just gambling with a lot of veneer to cover it up. Enough with the games.
News happens and things change quickly. Also there is arbitrage between similar assets, and investors benefit when that arbitrage is reduced by frequent trading.
The vanguard marketing runs deep.
If that's what you want, then just hold. The beauty of capitalism is that nobody's forcing you to buy or sell.
Be a Warren Buffet and buy for keeps, and obviously you can do very well for yourself if you choose wisely.
I think the ‘Texas’ part in the TXSE is mainly from a business procurement pov. They’re hoping to capitalize on the recent growth in the area, which is possibly ripe for a lot of new listings. The actual electronic trading might still originate in NJ.
I don’t believe they’ll have a floor. I think they are going the NASDAQ route, unless I’m confusing them with Long Term Stock Exchange (I was researching both around the same time).
Take the above with a heap of salt. It’s part my intuition and part things I might have read on the internet (including their corporate site).
TXSE has also made overtures about putting live trading in New Jersey like everyone else, but they may be putting their back-end in Texas.
They have job postings that include NYC-based network operations engineers. https://www.txse.com/meet-the-team#careers
Couldn’t they just send some hardware down Texas to co-locate there (presuming specialist hardware) and add another deployment target for their software? Would it be that hard?
The speed of light limits fibre speed which in turn limits high-frequency trading.
Flash Boys by Michael Lewis was a fun read on the subject. One memorable quote alleged that HFT traders would "sell their grandmothers for a microsecond [of edge]"
The issue is the speed of light.
for an interesting reversal of the "problem" of the speed of light, IEX is a stock exchange design to combat HFT by adding a physical speed bump by way of 38 miles of fiber optic cable. The general idea being to level the playing field and improve market liquidity using physical communication limits of light. https://en.wikipedia.org/wiki/IEX
That marketing gimic adds hundreds of microseconds to order latency. It’s not designed to level any playing fields it’s designed to get publicity.
Not really because anyone running a trading strategy that needs to worry about latency is already running their servers in the same datacenter as the exchange, so that just moves with it. What probably is an issue is that the datacenters required for a market don't look like AWS datacenters. I don't have any direct experience here, but I would be shocked if HFT software is something you could just deploy to a standard VM like on AWS.
They'd probably be running in an Equinix facility instead of AWS.
[dead]
[flagged]
Pardon my ignorance but can anyone can help me figure out what does it mean to have a new stock exchange? Dont exchanges sell the same stocks? Is it just a way to earn some fees by capturing some of the trades in their platform?
I'll obviously google it now but I'd appreciate some insight.
Each exchange can make its own rules for what it will list and how it will trade (within the broader SEC regulations).
So yes it’s just a way to capture fees from listers who like your exchange better as the primary listing exchange and from market participants that must be in every exchange (latency sensitive HFT).
None of the many exchanges that have started have made a dent in the existing duopoly for real share listings that Nasdaq/nyse have. But some exchanges have made good business off of other products like etfs.
So in other words, healthy competition, and may the best man win. Contrary to many comments this is more than political reaction/posturing.
The state of Texas is the world's 8th largest GDP and a diverse one, with no one sector exceeding 9%. Texas is well-positioned relative to NYC for attention around AI, as it is not geographically constrained and has an energy advantage. There is financial credibility built in as 10% of NYSE listings are already HQ'd in Texas. And Texas has a pro-business regulatory environment.
This isn’t a zero-sum game where Texas grows at New York’s expense. The hope is it creates a larger, more dynamic market.
All true. Texas worker environment is not great though. Folks typically list income tax as an advantage but property and sales taxes more than make up the difference. Also, govt admin is fairly hostile to any infrastructure expansion, preferring to let the local car dealers buy new town charters with no infrastructure.
Environmental regs are not well managed generally.
Anyhow, not the worst state, not the best. Pretty balanced economy, like Ohio, Illinois, California, and Georgia.
Higher property taxes and low income taxes is preferable actually, it keeps the housing market from getting massively distorted.
Ideally you're correct - but it does have the very large side effect of making real estate fraud much more lucrative. This isn't to say that the potential of people breaking a law means we shouldn't have the law at all - but higher property taxes necessitate a much large spend into property value auditors and require a lot more stringency around property improvement permitting to ensure that increases in property value are captured and recorded accurately.
How much fraud we talking? I like to think along Matt Levine's ideas that at least some amount of fraud is acceptable - there will always be some amount of it and under or over-regulation creates a net-negative.
Tough to measure. A couple data points:
-NY state estimate $150–200M per year lost to real estate transfer tax fraud and evasion. On $3B receipts that is 5-6% breakage.
-Harris County (Houston) found $21M in improper homestead exemptions. On ~$7B receipts that is ~0.3% breakage
-Miami-Dade found $35M on $6.5B for improper homestead exemptions, 0.5% breakage
For comparison, IRS net tax gap is about 12%
One would expect transfer tax fraud/evasion to be an order of magnitude different from improper homestead exemptions.
For sure. Probably should be using the total homestead exemption eligibility as the denominator instead of prop tax receipts. Even then transfer tax is a "hill" and the homestead exemption is a "valley." But It's hard enough to estimate any of this data from a keyboard in a few seconds
Except the property taxes aren't based on the actual price paid. The tax assessment and appeal system is more prone to corruption than most states.
> Folks typically list income tax as an advantage but property and sales taxes more than make up the difference.
No, not really. Texas is still below average state taxes and you can see the breakdown of each state here:
https://en.wikipedia.org/wiki/State_income_tax#/media/File:S...
Yep, exactly what I mentioned, more than makes up for it especially once you factor in the higher Case Schiller on recent years causing increases to property taxes since 2022 (date of your image).
> preferring to let the local car dealers buy new town charters with no infrastructure.
I'm curious what this is referring to.
Probably talking about Starbase (elon musk).
Local state legislature has several car dealership owners that also started their own chartered towns. Wasn't thinking about starbase but that qualifies.
Did you have an example you wanted to share?
Ahh don't know why I missed that one.
.. and why it's even a problem.
"Good ole boy network" is real!
Texas wouldn't be texas without it
It could be so much more without it!
You can always move somewhere else. It's a big country with different state laws for every type of preference.
What a strange thing to say - - "sucks to be you if you don't like it, just leave" is not really how I'd expect people to have a conversation around identified policy gaps, especially among people that aren't there.
NYSE Texas didn’t see a huge influx of listings when they moved there and changed their rules. I don’t think “Texas” is particularly interesting to the conversation given the dominant regulatory regime will be federal and the trading will happen in NJ but I could be wrong.
There are lots of stock exchanges, which have started for lots of reasons but there isn’t really much of an industry desire to be out of nyse/nasdaq for vanilla listings. If there was it would have already happened.
Seems like a publicity stunt to siphon some regnms traffic and maybe some etf listings to me, but no big drama if not.
>This isn’t a zero-sum game where Texas grows at New York’s expense.
Not at all.
New York is standing to gain quite a bit.
>TXSE was backed by wealth management giant BlackRock and market maker Citadel Securities, among other firms.
>The Texas company said in June 2024 that it raised a total of $120 million from more than two dozen investors.
Ever heard of "The Texas Company" from 100 years ago when they first discovered huge gushing oil wells in Beaumont? Popularly known as Texaco, it was of course, a New York company.
Go back before 1837 and Houston itself was unpopulated ranchland while San Antonio and El Paso were well-established western towns.
Until New York investors bought the ranch and built the planned industrial community we know today.
As someone who's considered taking my company public (not a tech company) it's nice to see easier listing requirements on this exchange than the big ones.
The most insightful part of your comment was that you needed a throwaway account to preserve your HN social credit score to take a completely moderate and constructive position.
This sounds like the sort of "norms" thing that a GOP-leaning state would abuse to circumvent SEC regulations by somehow declaring a state-owned exchange as some sort of SEZ to allow unregulated exchange between domestic and (primarily) foreign entities.
Texas is famously fraud friendly as well
Or options products, e.g. cboe
As a concrete example, Nasdaq had a rule requiring boards of directors to have a certain amount of "diversity".
To add on the "make it's own rules" point. This is a real thing, there are stupid rules which have been put in place at various moments and many companies are sick to death of it.
https://chatgpt.com/share/68e6a1a5-e634-8002-ac97-6e2e36052e...
> Dont exchanges sell the same stocks?
No. Each company chooses what exchange their stock is sold on. Sometimes (often for large companies) you are on more then one exchange, but never all of them.
Nothings stops an exchange (laws may not allow this but remember exchanges are in many countries and only subject to the laws of their country) from handling stock that the company doesn't want on them, but the value of an exchange is other people are looking there when they want to buy and sell and so it would be hard to get enough traders if the company doesn't want to list with you.
Not all exchanges handle stocks. There are other things traded as well.
> the value of an exchange is other people are looking there when they want to buy and sell and so it would be hard to get enough traders if the company doesn't want to list with you.
Doesn’t regulation NMS make this significantly less relevant? A stock trading on an exchange where it isn’t listed is going to trade at the same price as everywhere else, modulo however long it takes to arbitrate the price between the exchanges.
Also, I too am struggling to understand posting a trade of an unlisted stock to an exchange. This sounds pretty similar to a dark pool?
Stocks trade when there is a buyer and a seller. An exchange you are not officially listed on is unlikely to have many sellers and so they may not have any stock when you want to buy. Of course they can keep a lot of stock on hand (that is become a market maker), but that means they arbitrage games (either they or someone else), and if their volume of trades is too low (which it will be because few traders think to to use them) they are going to lose money on that deal.
Back in 1800 an exchange was a place where a lot of buyers and sellers agreed to meet up so that you had good odds of finding a buyer when you wanted to sell. The exchange happened by exchanging papers which then got sent to the company to know how the new owners were.
This gets at why there were a lot more exchanges in the past than now. Ownership is recorded electronically (you can get paper but almost nobody does) do you don't need to send papers into head quarters. We also have fast communication so can have your agent take care of things in New York in seconds no matter where in the world you are - in 1800 you had to physically go to an exchange (or send an agent).
An unlisted exchange is similar to a dark pool. The company whoes stock is traded on one will treat the trade like any other dark pool. However if they are trying to operate like a listed exchange they will doing other exchange like things (posting prices), so you get the worst of both worlds.
I thought stocks don't trade on exchanges where they're not listed - that's what listing means, right? And most stocks are listed on one exchange.
Most (this is close, about half) stock trades are not on the listed exchange. If I sell stock and my broker has someone else wanting to buy that stock they are just going to internally match us up at the current price instead of going to the listed exchange. There are a lot of "dark pool" exchanges that brokers will check with first when someone wants to buy/sell stocks and so only rarely (again about half the time - not very rare) will they go all the way to an exchange.
Nothing stops an exchange from accepting trades for a stock that isn't listed there. (there may be local laws that say otherwise, but there are lots of different countries). However if you are not a listing exchange brokers might not think to check your exchange when someone wants to trade and so you won't get enough volume. If you are the exchange a broker checks first though you can be the exchange.
Loose language here: in the US you choose which exchange you want to be your primary listing. Listed securities can and usually do trade on all exchanges. Exchanges have different liquidity profiles and market makers. The rules are enforced to ensure that you can send an order to any exchange and you should always get the best price even if it's on another exchange. During regular market hours...
Mostly yes, but a more optimistic (if naive) perspective is that the exchange wants to bring something new and valuable to the market. There are tons of little rules on exchanges about how stocks trade, and these can affect the amount of stocks and prices of stocks that different investors are able to get. These rules (often called microstructure) are partially determined by law, but there's differentiation between exchanges, and so one of the things a new exchange can do is introduce different rules that might make the market more "fair" depending how you define that.
In this case it's a marketing ploy for the state of Texas and also a way for Schwab, citadel, blackrock and fortress to press their finger on the balance of power which is far tilted towards the ICE.
Also note Schwab is headquartered in Texas and they account for a significant percentage of trading in the US on a daily basis.
Surprisingly, no - moving a stock from one exchange to another is a lot harder than selling on one and buying on another (and slower, and more costly for small quantities), so stocks are surprisingly immobile. Only if you really had to, would you move them. And most stocks have one particular home exchange and there's no reason to trade them anywhere else than the one place that has the highest volume and lowest spreads for that stock.
> there's no reason to trade them anywhere else than the one place that has the highest volume and lowest spreads for that stock.
Norbert's Gambit is a good reason. It is potentially the cheapest way to effectively do a currency exchange.
[1] - https://www.finiki.org/wiki/Norbert%27s_gambit
There are reasons for the listing company to not want to be listed on an exchange though.
Enron 2.0 Bigger and Unregulated!
Many HN readers with an interest in HFT will find the Sniper in Mahwah blog excellent reading. No longer publishing since 2019 as far as I can tell, but it was great while it lasted:
https://sniperinmahwah.wordpress.com/
> world-class exchange rooted in alignment
Does this actually mean something specific?
> Does this actually mean something specific?
Probably:
Trade matching algorithms (prorata, FIFO, TOP) and rules (capital requirements, market impact definitions) will align with the interests of the most profitable customers.
Citadel Securities, with their HFT-level returns of 50-100% per year will not venture into a losing business.
Note, CitSec is different from Citadel (hedge fund), and the hedge fund is also crazy with 40% annual return before fees (past 20 years) and 19% after fees to the outside passive investor.
How does this compare to HRT?
No. They have planted a seed and Trees don't grow overnight.
Enron 2.0
Is there anything interesting or novel about this exchange, other than its headquarters are located in Texas? From what I can tell, the primary data centers will be in New Jersey like all the others.
Yes, from https://www.txse.com/solutions:
The alignment part translates IMO to avoiding political / social science policy issues like avoiding affirmative action listing requirements like the Nasdaq Board Diversity Rules that was just recently repealed: https://corpgov.law.harvard.edu/2025/01/12/fifth-circuit-vac....So it is as one might imagine, the formation was probably for similar reasons why owners are moving their company registration out of Delaware.
In a structurally-biased environment, the loss of policies that counteract that bias does not allow companies to "avoid" politics and social science; it allows them to take the side in favor of the structurally-biased status quo. Just so we're clear about what that is.
Delaware protects the shareholders. It's uncertain what will happen in Texas.
https://www.bloomberg.com/opinion/articles/2024-02-01/texas-... https://www.bloomberg.com/opinion/articles/2025-02-03/texas-...
The recent story involving Elon's compensation package has also put into question how seriously Delaware upholds business contracts.
I'm sorry but what?
Delaware law exclusively protects the interests of the board of directors. It allows for a unique provision - the hilariously misnamed "Shareholders Rights Plan" that enable a board of directors to issue shares as they please, in order to make sure every attempt at takeover isn't against the interests of the directors.
The only check on the power of the board in a Delaware corporation is the Delaware court of chancellery.
The irony is that the Levine article the parent provided argues that DE did the exact opposite of shareholder wishes!
> it is weird that Tesla’s management and board of directors and (a large majority of) shareholders all agreed that Musk should get paid $55.8 billion for creating $600 billion of shareholder value, and he did do that, and he got paid that, and a judge overruled that decision and ordered him to give back the money. I can see why Musk — and Tesla’s board, and its shareholders — would find that objectionable! They’re trying to run a company here.
[flagged]
EU member states have more sovereignty than US states by a big margin. There isnt even a federal tax in EU.
President is sending national guard troops from Texas to other states........and this guy says this lol.
EU countries definitely have more sovereignty than US states. I really don't know how people can be this confidently wrong.
[flagged]
The "real reason" people "freaked out" about Trump dismantling agencies is that he was and has been ignoring the law by fiat and not executing the law as is his constitutionally defined role. It would be one thing to veto a refunding of the DoEd, to approve a dismantling of the DoEd; it's another to unilaterally dismantle institutions that have been enacted into law by Congress. The DoEd is no more unconstitutional than the DoD or any other cabinet-level institution.
I think it's fair to have a hard discussion about the effectiveness of or need for the DoEd, but the way to do that is in Congress, not by fiat by the president. The way the Trump administration has approached it IMHO is grossly unconstitutional and a violation of the separation of powers. The only semi-reasonable rationale I can think of is that Congress is implicitly approving of or voting on the president's actions by not impeaching him, but that seems like an unreasonably high bar, equates lack of action with active approval, and it also infringes on the power of the Congress that enacted the law.
As someone else here on HN noted recently: what is the point of anything pertaining to congressional vote procedures, veto authority, overrides, and so forth if the president ignores, and is allowed to ignore, the laws that are passed anyway?
> mental shackles of subordination to psychological abusers and manipulators that are constantly pushing the idea that state's rights are subsumed to federal rights
Wow. The inter-state commerce clause is a real thing and it does give the federal government broad lattitude to regulate "commerce" across state lines. Commerce seems to entail the flow of both goods and services. We are in this situation because people at the state level decided, democratically, that some decisions should be made federally so as to avoid a huge patchwork of differing laws. To put it bluntly, I don't want to have to carefully review and compare Oregon state law with say Texas state law before I undertake any travel lest I accidentally commit a felony in Texas by doing something that isn't against the law in Oregon, and that's a really good reason to try to limit the differences between the two. If you don't, you'll necessarily chill travel and commerce across state lines because those differences will present a huge barrier to entry and create a big suck on peoples' time and attention.
> These United States, and after the Civil War the de fact illegitimate federal government called itself The United States
This is getting into Soverign Citizen type reasoning.
> This is getting into Sovereign Citizen type reasoning
Getting? The dog whistle is a bullhorn.
Wow, a lot of words to say you wish you owned slaves. Usually, these types of arguments were cloaked by going after FDR.
Run by Blackrock & Citadel, instigated in part to circumvent DEI protections, in a State that can’t keep their power grid stable, promising less regulations for the people running it and listing their companies on it.
Simply put, this is Republicans pushing for “Y'all Street". Target one will be earnings reports, but the eventual push will be to not be overseen by the SEC in some important capacity.
> will be to not be overseen by the SEC in some important capacity.
How would a securities exchange avoid being regulated by the securities and exchange commission?
> How would a securities exchange avoid being regulated by the securities and exchange commission?
By having a Governor who's friendly with the President?
The President has a good amount of sway over the SEC. https://www.usatoday.com/story/money/legal/2025/03/03/sec-dr...
When you have headlines like this: https://www.ft.com/content/55d4c6e5-663b-4b09-a374-1a607f82a...
Relevancy to the question raised above, aside, that's a bad article headline as it doesn't match the contents.
SEC Chair says they are going to hunt crooks more aggressively, but won't leverage dawn raids as much to chase technical violations.
> SEC set to see hundreds leave through buyout, retirement offers https://www.politico.com/news/2025/03/21/sec-buyouts-retirem...
> US SEC buyouts hit legal, investment divisions hardest, data shows https://www.reuters.com/business/world-at-work/secs-legal-in...
> SEC Formally Withdraws Fourteen Rule Proposals https://www.proskauer.com/alert/sec-withdraws-fourteen-rule-...
The actions generally do not seem to match the words, and seem to point to a general trend of deregulation and lack of oversight (as the administration has said they would do, and especially in the crypto space has essentially stopped prosecuting crimes)
Going up-thread, here's the original claim under contention:
>> will be to not be overseen by the SEC in some important capacity.
Your articles don't dispute this.
As for whether oversight will be "weaker" and more de-regulated, maybe.
1. There's a headcount reduction. At worst, there's a quote that some really experienced watchdogs are out the door. Hard to tell until we get outcomes.
2. As for withdrawal of proposals, look closer.
> Although most observers doubted that the current Commission would adopt these proposals
Which makes it sound like the proposals were just withdrawn for later submittal and new discussion. Footnote #1 goes into how this isn't really unprecedented, citing similar withdrawals (or resets) under the Biden admin.
Sure, I am just saying the comment about "hunting crooks more aggressively" seems to run counter to their anti-regulation stance, and their active lack of hunting crooks.
> in part to circumvent DEI protections
Those were struck down 11 months ago, though?
> eventual push will be to not be overseen by the SEC
But no crimes will be committed, because they're trustworthy businessmen
> DEI protections
Forgive my ignorance, but what does that mean in this context?
I don't think the NYSE had any DEI requirements, but the NASDAQ created a rule where boards needed some minority representation in order to be listed. That rule was challenged and overturned in court though.
> On August 6, 2021, the SEC approved Nasdaq’s proposed diversity rule for companies listed on its exchange. The rule required Nasdaq-listed companies to (1) publicly disclose board-level demographic data annually and (2) have, or explain why they do not have, a certain number of diverse directors on their boards. Companies with more than five board members were required to have two members from an underrepresented group, including one female and one person who self-identifies as Black, Hispanic, Asian, Native American, Alaskan Native, Native Hawaiian, Pacific Islander, biracial, or LGBTQ+.
https://ogletree.com/insights-resources/blog-posts/fifth-cir...
Sounds illegal, no wonder the courts tossed it.
This is off topic but I wanted to make sure that you see https://news.ycombinator.com/item?id=45522422 since the thread is a day old at this point.
This is tinfoil hat conspiracy thinking.
Right. Just like all the autocratic Project 2025 plans, defunding healthcare to give tax breaks to billionaires, sending US military to police US cities, and all the other current actions were " tinfoil hat conspiracy thinking".
There is a party actively committed to implementing autocracy as fast as it can. To willfully ignore that and attempt to deflect from it as you are doing is wrong.
Moreover, if you don't think an autocracy will hurt YOU because you are in some protected group, you are wrong — it might not hurt you first, but it will hurt everyone, including you.
Moved on from the fascist rhetoric I see.
Right, from a 24-day old account making only right wing political comments, a comment that addresses exactly zero of the points made by the initial post.
And regarding ignoring fascism/authoritarianism, you need only look at the difference between fascist and democratic societies
In democratic societies, the three branches of govt are independent, and the branches of civil society, press, academy, religion, business, industry, finance, entertainment, sport, and non-profits are ALL independent.
In autocratic societies, the power of the government is abused to corrupt or coerce all three branches of govt and all segments of civil society to serve the will of the executive.
EVERY single move by the person occupying the President's chair and his party as been to reduce or undermine the independence of the other government branches and all segments of civil society. The party who claims to be about "free enterprise" and "free speech" is seizing ownership of corporations, directly interfering in individual hiring decisions, and even making govt threats to get COMEDIANS fired. Seizing ownership of corporations, even partially, is more typical of Communist governments than democracies.
See if you can find a single substantive exception since 20-Jan-2025 where this administration increased freedom of expression or freedom of economic action, especially when such expressions or actions were unfavorable to it.
Lecturing people on basic US civics doesn't really prove anything.
Lifting prohibitions on nuclear power and nuclear research would qualify I think. That took me about 5 seconds to come up with.
Your side is losing, so you attack, attack, attack. But all you are doing is driving reasonable people away. Your hyperbolic rhetoric is literally getting people killed. And you lie about the victims to justify that violence.
There is some truth for you...
>>Lifting prohibitions on nuclear power and nuclear research
The first thing coming up when I search that phrase is literally everyone but the current administration doing so: 1) World Bank, 2) Denmark, 3) Illinois Gov Pritzger (Dem), 4,5,6,+) Asian Bank. So, perhaps the administration has also reduced regulations in this area, but this is not an economic freedom that reduces concentration of power, particularly as this administration requires a vig to play in every area it can.
As to the rest of the allegations, they are vague, broad-brush, hyperbolic and entirely devoid of any actual examples. No truth at all, or only the kind of "truth" found on Truth Social.
But you do follow well Goebbels' instruction to accuse the enemy of that which you are guilty
Besides being stupid he also completely lacks the balls and manhood to own up to being demolished. Completely expected from this type.
I will be keeping a record of this username as a known liar and coward for any time I encounter it again.
Consider a broader range of news sources in your daily diet.
Speculation (no pun intended), but …
CEO OF Robinhood has been talking about offering crypto as a vector for acquiring shares for private companies:
https://www.sec.gov/about/crypto-task-force/written-submissi...
This admin and this new exchange would probably allow all kinds of nonsense to be publicly traded compared to other exchanges.
We’ve got three more years to go and this exchange, or anything new that happens in Texas is absolutely going to be tied with deregulatory ambitions.
You mean that ceo that hawks scam coins as fraudulent ways to invest in OpenAI.
OpenAI will be the largest IPO in quite some time, so I totally see why RH is trying to profit off of additional derivatives on this thing. Volume will be off the charts.
There will be no IPO, there is no need.
Seems especially suspicious with the 401k executive order, like a nice avenue to get unaware people invested in digital Beanie Babies.
Hopefully they will provide cheap market data like IEX did in its beginning.
Yeah, this is more competition on the scene. We should welcome competition.
Yes, but it’s also another NMS venue that everyone needs to connect to, so there’s a cost as well.
Is there a similar source you're aware of, cheap with a clean API? Hated to lose IEX.
Depends what you are looking for. Is it real time quotes?
IEX data is now free after 15minutes instead of 15milliseconds.
One option is the Databento US Equities Mini for 200 USD per month. If I understand it correctly it is some sort of weighted average between multiple exchanges.
I've been happy with Databento as a low-friction way to get market data. I liked it so much, I ported their structs and APIs to Golang. [1]
Their EQUS Mini dataset is a great way to dip the toe if you want live data without licensing restrictions. Databento's article talks exactly about how it is sourced, but it is not that it is averaged but anonymized, specifically because of the complexities of upstream exchange licensing. [2]
You don't have to pay $200 per month for that -- that's for all-you-can-eat. You can experiment with pay as you go.
You can use my dbn-go tools to help you... here's the cost to get all the 1-day candlesticks for all the US Equity Symbols for 1-year... which you could use to make all sorts of charts and redistribute them freely (the trickiest part honestly):
So $4.38 for all that data or $3.78 for just the NASDAQ exchange (not sure of redistribution of that one).I hang out on their Slack. Today there was a deep discussion about optimizing C++ SPSC queues, although it is usually isn't too technical like that. They are pretty transparent about how they implement things.
[1] https://github.com/NimbleMarkets/dbn-go
[2] https://databento.com/blog/databento-us-equities-mini-now-av...
[dead]
Ah so no timing arbitrage in finding a place in Tennessee where data arrives from both places milliseconds apart and you can explore minor differences in pricing
People online like to yak about the woke nonsense.
Reality is there are tax and regulatory advantages. The courts are setup in a way that is favorable to business. They read a very strict interpretation of contracts which is good in some scenarios.
Texas politics is a train wreck, but their bureaucracy is pretty good for a business - things like permitting and other regulatory processes are faster. They also will firehouse you with incentives.
> Reality is there are tax and regulatory advantages. The courts are setup in a way that is favorable to business. They read a very strict interpretation of contracts which is good in some scenarios.
> Texas politics is a train wreck, but their bureaucracy is pretty good for a business - things like permitting and other regulatory processes are faster. They also will firehouse you with incentives.
None of that is really relevant to a stock exchange though. Being on the Texas stock exchange doesn't mean you are subject to Texas laws and regulations just like being on the New York Stock Exchange doesn't subject you to New York laws and regulations.
You are correct, mea culpa.
I imagine as businesses move away from NY and SF, they want their stock exchange to move with them, and for similar reasons.
As far as I'm aware, all of the major exchanges in the US are in NY or in Chicago, and even then, Chicago is mostly just futures exchanges for commodities and not stock exchanges. So unless you're headquartered in NYC (which most companies listed on NYSE/NASDAQ are not), you're already not working with a stock exchange in the same area as you, and failing to collocate the stock exchange isn't really a detriment. (Interestingly, even historically, when stock exchanges were more plentiful in the country, there just doesn't seem to have been much demand for a stock exchange on the west coast at all.)
The main reason to move away from the NYSE or NASDAQ is if you don't like the rules those stock exchanges have.
Scams. The answer you are looking for is scams and fraud
And yet, it’ll be inevitably be seen as the Dollar Store stock exchange.
“Well, we IPOed!”
“Congratulations!”
“…in Texas.”
“Do you need to use me as a reference?”
I bet there will be tons of pressure for OpenAI to IPO on this Texas exchange.
“We’ll consider it, but we consider this important and want to be taken seriously.”
Why would businesses want to move away from the 4th largest economy in the world to less successful states?
40% lower labor costs, 60% political posturing.
I’m sure all their infrastructure and probably the majority of their employees will be in the NYC metro area.
Theres a lot of reasons people will list (cultural, cost of living, quality of life) but the real answer is
1. Texas is a corrupt state and you can bribe your way in to power
2. No income tax
This reads like a press release.
Here's an article that appears to provide a bit more perspective: https://www.reuters.com/legal/government/txse-says-sec-appro...
Also, this is a fun nugget from the Reuters article about this new exchange providing competition to NYSE and NASDAQ:
> But those rivals are not sitting idly by. On March 31, the NYSE opened its own Texas outpost, disclosing that Trump Media & Technology would be the first company to list there.
Adding another source from the Texas Tribune I posted a day or two ago but never gained interest
https://www.texastribune.org/2025/10/06/texas-stock-exchange...
Well we wait for TXSE to do IPO and get listed in NYSE/NASDAQ and then we buy TXSE since house always wins.
> since house always wins.
House doesn’t always share with outside investors
The owners of the house can’t wait for their cash cow to grow up and print money so they will take it public and cash out with promise for future returns. This is a game as old as capitalism.
[dead]
Not to be confused with NYSE Texas which also launched this year and an entirely different thing
https://www.nyse.com/markets/nyse-texas
To add to the confusion, NYSE Texas is just a rebranding of NYSE Chicago which used to be independent of NYSE when it was its own thing.
TY. That is what I thought this was
200+ comments, HN thread:
https://news.ycombinator.com/item?id=43045558
Or the TSX!
> At $2.4 trillion, Texas' economy is larger than many countries', including Russia, Canada and Italy, according to a report from the governor's office.
California's economy is $4.1 trillion and has a much higher chance of growing larger with most of the AI companies based out of CA.
Not sure I understand your point. If someone wants to open an exchange there, what’s stopping them?
I’m a Dallas resident and this has been a large coordinated effort that has a lot of banks relocating here. Not going to debate the good or bad of it, but Texas tends to go after these types of things and creates a favorable environment for it from a business/tax/political standpoint. I don’t know what California does, but I know a whole bunch of Californian corporations have moved here citing similar reasons. So again, what’s stopping something similar from happening in California? (If it doesn’t already exist)
What's to stop states from increasing the amount they compete with each other to lure businesses by reducing regulations, lower taxes, etc
I think this is a loop that hurts regular people.
Less regulation could open people to more risk and less ways to combat it.
Lower taxes for businesses means that state funding must be made up with either cuts to services or higher taxes on people.
I think Republicans will use these incentives and the federal government's power to push all the money to red states causing economic decline in blue states which they can then blame on the leaders of those states.
I know this already happens but now that Trump is open to blackmailing states with funding because they aren't run by Republicans it will get worse
> doesn't this cause a loop that hurts regular people?
I've seen this described as "a race to the bottom."
You can also choose which state you live on based on lifestyle preferences and risk tolerance.
Those are formulated as hypothetical statements and "what if" questions, but it already works that way in the United States.
I meant what if it gets worse? I thought that was assumed.
Corruption, tax inequality, and the use of political power to benefit business will always be present and therefore the amount is what's important.
Every politician lies so that doesn't matter. What matters is what the lie about and how often it occurs. It's the same with corruption.
What relevance does that have? I genuinely don't understand the purpose of your comment.
It's not like the article was suggesting Texas had America's largest state economy. It was just showing that it is large. Which it is.
What does California have to do with anything?
CA have LTSE. but somehow they are slow or stopped? not much news about it.
I expect a series of other choices that force the business into Texas as a way to choke out California for not bowing to the will of a king.
I hate defending his highness, but this has been in play way longer than he’s been in office.
Almost every thing happening right now involves organizations that have been making plans to do things for a very long time that is being hyper accelerated or the competitive landscape drastically distorted to give advantage.
I should be happy right now as X and Y and Z are available, some of which support some of my ideas, but I'm smart enough to know that giving me a few trinkets while screwing the system as a whole doesn't work.
They already have multiple trillion dollar companies and how has that worked out for them? Rampant homelessness and crime in their "Premier" cities, skyrocketing cost of living and housing prices, etc.
Or most of those AI companies could go bust. Nobody really knows yet.
[dead]
Doesn't this increase opportunity for arbitrage as it's not likely exchanges are going to be perfectly synchronized to the overall market? Also doesn't this also offer opportunities to sell pink sheets stocks in what is conceivably a "fresh market"?
Arbitrage and the agents conducting these transactions is good for open rational markets. In fact they are essential
I always wonder why an economic powerhouse like California or Washington doesn't have its own stock exchange.
Maybe it is the strict regulation that makes it not viable?
There used to be a variety of exchanges on the West Coast but it seems like they couldn't compete with the automation and HFT innovation happening in NYC, all the west coast engineers were too busy with the dot-com bubble it seems.
The LTSE is headquartered in San Francisco.
NASDAQ is eponymous for the market cap fluctuations of techno-capitol.
TSE is valued at 2.4tn.
Texas, well known for the strength of it's financial regulation.
Like in Civ6, I'm sure it will require a lot of power.
I am guessing insider trading will be legal here.
You are welcome not to use the exchange if you believe it's not advantageous. this is a benefit of competition.
for some. And very illegal for others.
If you have paid the campaign support subscription that includes 2 free pardons. Only $2 million/year.
Texas hold `em; Texas short `em
This headline is kind of dumb. Yes, there is yet another new venue. But other recent "new" venues include MIAX, IEX, MEMX, and soon to be active - 24X. Oh and let's not forget the Long Term Stock Exchange (LTSE).
Oh great another stock exchange with fewer rules. Elon must be so happy.
_Surprised it's not a segregated exchange._
TX as in transaction
Now CA needs one
They have LTSE (Long Term Stock Exchange).
[dead]
Hope they have ample backup power
Doesn't matter where you are you need that. There is no place in the world where the grid is reliable enough that someone who wants to operate with high reliability can get by without ample backup power. Grid power is normally a lot cheaper than running backup power (that is the capital and maintenance costs are sunk costs, just counting fuel) so it isn't worth disconnecting from the grid despite having enough backup power that you could.
There are grids where you are planning for hours of power outage, grids where you plan for days, and grids where you plan for weeks. Texas is in that last category. And you have to ensure your internet uplink has similarly reliable backup power
One of my previous employers only lost our east-coast colo facility twice in their couple decades of existence:
- once when the DC ran out of diesel and couldn't get any more after Hurricane Sandy
- once when the backup generators caught fire and the fire department needed to kill grid power to the facility
Everything else is pretty reliable or easier to decouple from the local real world
some former soviet industrial parks are like that. They had redundant direct lines from say local power plant, a direct line from fairly far geographically removed Nuclear power plant and regular grid. They were classified as critical consumer so hospitals would get cut from the grid before they would.
[flagged]
I know this sub thread kicked off with snark about regional grids. That said, TXSE will be located in Dallas, a T5 datacenter city.
Why can't it be MORE reliable than XNYS/XNAS?
Because the powers that be in Texas will siphon off funding to make things work better to fund their own projects. "Should we winterize our power grid" Nah, it's Texas where it doesn't get that cold for that long. Should we implement a warning system in an area that is historically known for being prone to flash flooding? Nah, it doesn't happen that often and we have other things to spend money on instead.
I wasn't looking for conspiracies and disconnected facts (i.e., flash flood through a rural, summer camp).
Dallas was a T5 datacenter hub before Uri in 2021 and did well during the storm because they were designed to service level guarantees [0].
It's also silly to claim that TXSE's performance is disconnected from serious TX investors.
[0] https://www.datacenterdynamics.com/en/analysis/how-data-cent...
What conspiracies? These are actual things that happened delivered as a sarcastic dialog that goes to show how the government in Texas behaves. Also, I never claimed anything about investors of TXSE. At the end of the day, it doesn't matter where an SE's data centers are located. They will all need redundancy plans. If you think Texas is a better location than other sites, then you have to focus on what have historically been issues for Texas. If you depend on the state's government doing things other than lining their pockets or at least the favorite pet project's coffers, then you are prone for failing. Those unwilling to study history are doomed to repeat it
I get you're heated about Texas politics.
I'm afraid your comments just come off as an attack on local politicians and their priorities, not the topic of addressing whether TXSE could be more resilient than peers.
The discussion evolved into where the data centers would be and pros/cons of having them in the various locations. I was discussing the cons of a Texas location
Tho energy is also a lot cheaper in Texas than NY. If you have to have ample back up regardless, total cost of maintaining consistent power can be lower even when grid quality is lower
(ofc, I'm looking at retail rates, who knows what specific numbers can be cut in contract)
Is this true though? Texas has had some well-publicized failures (well, really one major one), but as best as I can tell they are more or less middle of the pack on grid reliability[1].
I mean, you'll need a backup generator anywhere, but the report I found (admittedly with just a bit of googling) makes it seem like Texas is a better potential location than quite a few states (including California).
[1] - https://www.citizensutilityboard.org/wp-content/uploads/2021...
The really major one is the only one that matters. If you are running a datacenter that needs to always be up and running, you're going to need backup power. A power grid that goes down once a decade for multiple weeks is far worse than one that goes down for 5 minutes once a week.
In Texas, if you support those in power with good enough donations, you can ensure that your site does not loose power when the decision is made on who to disconnect. So you can spend the money on back up power equipment, or in donations. Either way, it's going to cost to play.
[dead]
Yeah, Oncor isn’t great. They do just enough to keep the lights on for regular customers. But I’m pretty sure large data centers negotiate a higher level of service and purchase power at discounted rates. FB, for example, has a massive data center in the Alliance corridor — check out the link. Those trailer-sized units you see along the outside of the building are enormous diesel or natural gas generators — more than a hundred of them, each about the size of a locomotive. They even have their own electrical substation. The scale and redundancy of that place are unbelievable.
https://www.google.com/maps/@32.9832754,-97.2573651,467m/dat...
So I’d imagine they could keep everything running for as long as necessary. I remember during the big winter outage a few years ago, they didn’t have any issues at all.
Each building has 2 large fuel tanks which is where I was expecting to see a fault in the plan. I wonder how redundant the fuel supply is. If building 1 is the only one on generator power and the fuel tanks start to run low, can they easily route more fuel from another building's tanks? Just how paranoid were they with the design?
When ever there is an extended power outage at a facility like this, tankers show up. I would not be surprised if there are contracts with Suncor distribution to have a steady flow of tankers supplying fuel to the facility. There are several fuel distribution hubs throughout the DFW area that supply the local markets including two major airports.
That's a big assumption, and precisely why the tanks are on site. If snowpocalypse events make roads unsafe to drive, those tankers might not be there. There's always a way to think about how something else could go wrong. At some point, you just have to say it is good enough for the money willing to be spent.
[flagged]
The NY4 data center is on the edge of a tidal marsh (The Meadowlands) in Secaucus NJ, I would be curious to know Hudson County NJ uptime and the uptime for the area near the Texas data center.
ChatGPT is a long, long way from being able to successfully analyze this sort of thing. Texas's failed in a way that caused people to freeze to death that's unlikely to occur in NY.
Finance eats first and suffers last. That's true in NY but doubly true in TX.
Equinix Dallas was hours from running out of fuel during the last snowpocalypse.
Is this saying it was "hours away" and safe or "hours away" and nearly missed a disaster? I assume the latter.
reminds me of "you can't put too much water in a nuclear reactor" from SNL...
For the curious: https://archive.org/details/saturday-night-live-s-10-e-06-ed... @ 53:42
Presumably they've learned from that experience.
The following 2 years, TX deployed metric shittons of solar and it was growing steadily until the very stable genius axed incentives.
https://www.gridstatus.io/live/ercot
Clearly, they spent a few hours too much on their backup capacity.
Hahahahahahahahhahaaaaaa hahahaaaaahaaah hahhahaaaa!!!!!
I'm assuming you interpreted they as ERCOT with that response
The people who live in Texas are completely and utterly shocked every time the temperature goes below 40F. Even though there is some kind of "winter" weather almost every winter, none of the houses or commercial buildings have insulation on any of the pipes. A lot of high traffic roadways are elevated and banked making them completely unusable if someone so much as spills a coffee on them, let alone having ice or even just rain on them. "Winterizing" is just not a thing. It is always deemed too expensive. Then disaster strikes, everyone freaks out, then forgets about it in a few months because the temp in the summers stays well north of 100F for weeks at a time. OF COURSE they haven't learned. It goes against human nature to think more than a few months ahead when the state "rainy day fund" is at stake.
I know of one DC that does government hosting so that they get prioritized to keep the lights on.
Wild! Source?
It would be helpful for readers to know what Equinix is
> Equinix's infrastructure supports the digital services businesses rely on, from cloud computing and enterprise applications to content delivery and financial trading platforms.
They are a very popular "high end" server colocation provider and have their own network with many peering agreements.
A lot of large companies put their servers into Equinix data centers.
An exchange having to stop trading and gracefully shut down their systems for a few days doesn't really strike me as a disaster though.
The NYSE was only closed for 3 business days after 9/11. Uptime is important for listed companies.
It might be slightly inconvenient to people who want to sell their shares.
Not really because there are a lot of stock markets these days.
But depending on the setup, often you just cant "sell the one thing at another exchange which you bought earlier at a different exchange", sure this depends on the country/etc.
There may be some odd financial instrument that can only be traded on a single exchange, but that's generally not going to be something that is liquid enough for HFT trading anyway. The idea that a stock is listed "on the NYSE" and can only be traded there is a quaint anachronism. e.g. https://help.tradestation.com/10_00/eng/tradestationhelp/rou...
I doubt the exchange infrastructure will be physically located in Texas.
In fact, it won’t be. Which is why NYSE was so quick to rebrand NYSE Chicago as NYSE Texas when TXSE made the announcement they were launching in Equinix NY4 in Secaucus. The only real differentiator these guys would have had (outside of listings rules) would have been location, but they opted for the lower resistance of locating with all the other markets.
Texas loses power one time for a week and the redditors will never let it go. Wild how this is still a cringe joke so many years later.
"There have been 263 power outages across Texas since 2019, more than any other state, each lasting an average of 160 minutes and impacting an estimated average of 172,000 Texans, according to an analysis by electricity retailer Payless Power (https://paylesspower.com/blog/blackout-tracker/)"
Also in 2021 210 people died. This is a huge deal. This wasn't just a little outage.
That website shows California as currently worse. It looks like Larger states just have more power outages, which is to be expected. Texas also is a weird state that is very large it gets Tornadoes, extreme heat, and hurricanes, while also having several very large metro areas in it. There also isn't anything indicated differences in grid monitoring, are all grids (like large rural grids) monitored to the same levels?
We also have a lot more growth in the past few years than most other places, both in relative terms, and in absolute (big state + high growth introduces more absolute friction than small state). Demand is forecast to rise over 20% from 2024 levels vs. an American average under 5%: https://www.eia.gov/todayinenergy/images/2025.07.31/main.svg
We have high power demand in both winter and summer: in the latter, air conditioners use a lot; in the former, about half of Texans heat with electricity because we have less cold and so less usage of cost-effective, grid-preserving furnaces.
Texas has been building a ton of wind and solar to supplement generation capacity and is taking some leadership in the next-gen nuclear stuff for a reliable base load, but in the mean time the shortage of CCGTs is going to bite in a state where demand goes up this much, this fast. SB6 passed this summer also should help with reasonable control and oversight.
California has power outages as a matter of routine in some places. When I went there the rural areas were constantly experiencing load-shedding power outages and some of the rural lodging advertised that they had backup generators because this is so routine there.
also selective exurban areas, for fire prevention, might be skewing the numbers. our datacenters in the city don't get these outages.
90% of the Texas grid is independent from the rest of the country
What you talked about is not a Texas grid problem, but a local problem. The Texas grid itself is very reliable.
> Also in 2021 210 people died. This is a huge deal. This wasn't just a little outage.
Yes, a rare storm knocked out power and people died. It is a big deal and a lot of things changed after the event.
But I want to put it into perspective. In 2024, ~62,800 people in Europe died to heat-related events.
Yeah, but that isn't really an apples to apples comparison. Texas for example had ~400 heat deaths in 2024 depending on where you look but in 2023 it was 334 or 563 depending on your criteria [1].
>But I want to put it into perspective. In 2024, ~62,800 people in Europe died to heat-related events.
Most of these deaths are not because of electrification but the fact that homes are built out of bricks and mortar and become ovens with heat waves that get hotter each year and ~10% to ~20% [2] of homes in Europe have air conditioning meanwhile ~95% [3] of homes have air conditioning. Your apples to oranges comparison mostly shows how Europe is generically unprepared for climate adaption (specifically heat resilience) and has nothing to do with electrification stability.
[1] https://www.texasenvironment.org/news-room/heat-related-deat... [2] It's all over the place some places like UK are around 5% adoption while southern Europe can be close to as much as 95% adoption. [3] https://www.eia.gov/consumption/residential/data/2020/state/...
The vast majority of these 400 heat deaths have nothing to do with the power grid. They are people living outdoors, roofers, elderly, etc. When the temps hit 105+ for long periods there are bound to be people who don't have access to AC or overexert themselves outdoors.
It's a perfect apples-to-apples comparison if you level accusations of grid incompetence at Texas. Should all those EU homes suddenly go out and buy AC, EU power grids would have to enact massive load shedding during heat waves. Such waves already push demand up, causing local blackouts and price spikes: https://www.ft.com/content/23b3dc59-b40f-48e2-ad93-e301de7ac...
[flagged]
Considering we've now routinely used more energy than the peak that knocked it over in '21, a lot has changed.
Texas has installed a vast number of solar and battery backup systems since 2019. And it will be a few years, but is going HEAVILY into nuclear (and for the next 3.5, is going to get auto-approval to actually build them. ERCOT is changing fast, don't rehash stale narratives.
Also wind, more than 40GW installed capacity, leading the USA and ahead of many other countries.
Only as long as the Texas politicians don't sabotage wind. Texas businesses make lots of money on wind, but the legislature and governor absolutely hate it.
Having experienced the Snowpocalypse and mini Snowpocalypse, weeks of 2019 PG&E PSPSes, and the 2000–2001 CALISO-Enron rolling blackouts, it's ridiculous for those in glass houses to throw stones.
Improper deregulation never ends well.
So about one every 9 days that affects 0.55% of the population. So in a 3 year window a Texan has about a 50% chance of losing power for 2.5 hours. Seems pretty good to me.
> Texas loses power one time for a week and the redditors will never let it go. Wild how this is still a cringe joke so many years later.
Texas had the most number of power outages between 2019 and 2023 [1].
It wasn't one time. And it's not a joke. Infrastructure weatherization is a very real overlooked (and expensive) investment that still has not taken place.
[1]: https://www.congress.gov/118/meeting/house/116952/documents/...
[flagged]
Maybe you got a bit lucky.
https://en.wikipedia.org/wiki/2021_Texas_power_crisis#Backgr...
> In 2011, Texas was hit by the Groundhog Day blizzard between February 1 and 5, resulting in rolling blackouts across more than 75% of the state… Following this disaster, the North American Electric Reliability Corporation made several recommendations for upgrading Texas's electrical infrastructure to prevent a similar event occurring in the future, but these recommendations were ignored due to the cost of winterizing the systems.
> Unlike other power interconnections, Texas does not require a reserve margin of power capacity beyond what is expected. A 2019 North American Electric Reliability Corporation report found that ERCOT had a low anticipated reserve margin of generation capacity and was the only part of the country without sufficient resources available to meet projected peak summer electricity demand.
If I hadn't been reading headlines I wouldn't have even known about the 2011 blackout, and I was definitely here for that. Things were pretty much normal for everyone around me and friends around the state (Houston, Austin, DFW, Lubbock, San Antonio, etc). The Superbowl even went ahead in AT&T stadium. It really wasn't as big of a deal as a lot of internet commenters seem to act like.
I lived in Texas and we never got rolling blackouts for this. We didn't hear about it from family and friends in every major Texas city. Maybe this means 75% of the state by area rather than population? We just didn't drive because much of Texas isn't set up to clear roads and, more importantly, few of our drivers know how to deal with snow and so most get very unsafe to drive around.
The report your wikipedia article cites for 75% says this: "In the case of ERCOT, where rolling blackouts affected the largest number of customers (3.2 million), there were 3100 MW of responsive reserves available on the first day of the event, compared to a minimum requirement of 2300 MW." So an eighth or so of Texas' ~25 million population in 2011.
You originally called someone a redditor making a cringe joke for highlighting a serious historical problem. It wasn't clear to me that it was a joke at all, but my impression is that it seemed clear to you that it was a joke.
What if that person has also lived in Texas for 30 years? And what if they had a family member that died during that power grid failure in 2021? I personally would find it quite difficult to communicate to them the nuance of a local problem and a state-wide problem when the end result is the same: no power.
In the future, you might consider approaching an interaction online with more balanced judgement.
Edit: Actually, looking back at the original comment, it's not even clear they're talking about the Texas power outage in 2021. All they said was "Hope they have ample backup power." Seems like a reasonable thing to hope for what might be critical infrastructure.
I'm not sure what is meant by Redditors... I haven't used Reddit in many years.
Admittedly anectodal, but I don't remember any power outage here in Chicago over the last 11 years I lived here, but I was in Texas for work for a few weeks this summer at the NASA balloon base and there were multiple power outages.
Anecdotal, but I've lived in DFW for over a decade. The only time I lost power for more than a minute was due to a drunk driver hitting a utility pole just outside my house. They had the pole fixed and everything working again within an hour.
Having lived in both DFW and Houston, I will definitely say Houston's infrastructure is much more fragile, but the weather is also much more extreme.
Yes, I agree. It was common to lose power for a day or so when the big hurricanes rolled through growing up Houston.
The Houston metro area is particularly bad. When I lived in Austin, the outages were very rare. In Houston, I would guess there is at least 1 outage every month that lasts for an hour on average.
"Redditor" in this context is just an internet-savvy way of saying "sheeple."
Texas' grid was very reliable when I was growing up there. Since deregulation however, it's no longer reliable. It used to be mandated that grid facilities were overbuilt to have some headroom for emergencies. That's no longer true. Now, Texas utilities only maintain the minimum infrastructure needed for normal operations and they have no cushion if something goes wrong. Any CEO of a Texas utility that spends money building overcapacity gets fired by Wall Street.
This was supposed to change after the 2021 crisis, but I haven't seen much evidence that it has.
in many country, electric(or energy) is state company
that way any infrastructure that related to serve the citizen well being isn't exploited for profit
why US can't do this????
The US did do this for most of the 20th century. Or at least something close to this: Many utilities were private companies but they were regulated monopolies. The state allowed them to be monopolies in exchange for tight state control.
In the 1990s this started to change. The idea was that the different utilities could compete for customers, and thus they wouldn't be monopolies any more and thus market forces would take the place of government regulation.
Of course this has failed spectacularly. Deregulation brought us the Enron disaster and the 2021 Texas grid crisis, among others. But since corporations control the US government now, there's no chance regulation will be brought back.
I'm surprised that you put the blame squarely on the the (bought) government.
Deregulation and "free" markets are something that many americans actively want. You can argue that they're misinformed and they're advocating against their own self-interest. But it's still something they actively want, this isn't just the evil corporations taking control of the corrupt government.
In fact on this very site I'd wager that more than half of Americans users are against regulation in general, state ownership of any utility, or any additional control on financial markets.
Yeah, free market is great until some company is reach certain size and monopolies certain shares and forces to bend the market at will
and US citizen let them do it, how can't you vote the fck out of this is crazy
“ Houston has the worst power outages in the nation; how bad is it in your ZIP code?”
https://www.click2houston.com/news/local/2025/10/07/check-no...
It's not just the "snowpocalypse". In Houston, for example, there have been multi-day power outages since then, often during hot weather where lack of adequate cooling can become a life-threatening concern. Personally I don't find it any more "cringe" than the weird boasting people like to do about our state.
https://www.forbes.com/sites/edhirs/2024/12/09/after-4-years...
it was an avoidable catastrophe, not just a minor blip
I still remember the northeast blackout from 2003 too and that was only a part of a day for me
Texan here. Going without power for a week during the 2021 winter black out really, really sucked. It had huge economic consequences.
[dead]
[flagged]
Reddit can become a echochamber, a one sided flog machine, all good content decaying, no good or viable business after 10 years (propped up by YC investors), it’s even become a slur to denote a certain type of brain and eventually it will die off like slashdot and digg did.
But you won’t be able to take the Redditors off the internet. They be lurking, waiting with a perfectly annoying post ironic millennial reply.
I hope the TSE does well and expect the state with the largest concentration of energy tycoons and businessmen will figure out how to add grid robustness - a problem solved in nearly all states.
> expect the state with the largest concentration of energy tycoons and businessmen will figure out how to add grid robustness
This reads like the energy tycoons and businessmen only recently moved to the state, and now they can fix the problems. My understanding is that these energy tycoons and businessmen presided over the creation and deterioration of the Texas grid in the first place.
> grid robustness - a problem solved in nearly all states
Shouldn't that drive the question of why Texas is so bad, though? This argument seems to amount to "Everyone else is better than us, so we must be the experts in fixing the problem.", which seems weirdly backwards.
This comment has won the cringe award
> Hope they have ample backup power
Texas has more reliable electricity than California
considering the California electricity provider PG&E shuts off the electricity multiple times a year when it gets windy outside, to prevent power lines falling (due to lazy maintenance) and starting a wildfire
I wonder where the California’s additional 13% tax on capital gains is being spent? SF parking ticket enforcement?
According to this Texas is the worst.
https://docs.house.gov/meetings/GO/GO05/20240312/116952/HHRG...
Wondering why you'd bring up California in a discussion about Texas.
"us versus them", "blue vs red", "liberals vs conservatives"
Texas is the favorite punching bag of the left, and California is the favorite punching bag for the right. When one side is attacked, they defensively jump to the default. Which is kind of ironic, when you consider there's more Democrats in Texas than in many "blue" states, and the inverse is also true for California.
I can find many Republican representatives, Trump, and media personalities insulting New York with sweeping generalizations and hateful rhetoric.
The only negative comments from Democrat representatives and the media on the left I see is are critical of specific laws, for example abortion, but they don't insult the entire state or generalize.
If you need specific quotes let me know.
Whataboutism: https://en.wikipedia.org/wiki/Whataboutism
[dead]
What did California have to do with this other than everything you are saying being laughable cope and false.
(Regional controlled brownouts and state wide power grid failure are not comparable)
[flagged]
Please don't make things even worse by posting bad comments yourself.
https://news.ycombinator.com/newsguidelines.html
Edit: your account has unfortunately been posting a lot of unsubstantive and/or flamebait comments (e.g. https://news.ycombinator.com/item?id=45412687 and https://news.ycombinator.com/item?id=45404646). Can you please stop doing that? It's not what this site is for, and destroys what it is for—we're trying for something different here.
If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful.
Please moderate your techie site and reduce the amount of politics and preaching, or else you will wind up like Reddit, digg, and of course, the once famous Leo Laporte, who is now exclusively preaching his politics to his 100 faithful followers.
This question has a lot of history on HN: https://news.ycombinator.com/item?id=17014869. If you'll take a bit of time to learn about how we approach it, you'll find that the site is pretty stable: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
It does fluctuate—we can't be immune from macro trends (https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...). But the principles we apply have been the same for many years, and if you step far enough back, the amount of politics is pretty consistent.
Well consider what makes the tech industry different than any other. It's purely cultural forces that define if someone's a techie or not, so of course it devolves into politicking.
> It's purely cultural forces that define if someone's a techie or not
No, this is defined by the knowledge and skill involved.
We live in an era where its trivial for anybody to learn how to code, and every level of new goalposts you add before saying someone is a true techie is imposed purely by cultural forces.
Musk trillionaire confirmed.
What is the need for another stock exchange? I hate that I am thinking like this but this is just going to be politicized heavily and companies like Tesla and coke will just switch to that exchange causing further more rift in our society. Where one company lists will become a problem for companies and they cannot be neutral politically even if they really are
I propose a global stock exchange for the whole planet. Heck, why stop here, make it for the whole galaxy in case Elon Musks manages to land on Mars.
I want 24x7, free or non-profit full book data streaming/downloading.
otherwise there is one more trouble for me.
Can only imagine how washtrading will become like American pie.
There were already two exchanges. I don't think this changes much.
There are currently about two dozen national securities exchanges plus a whole lot of alternative trading venues, broker internalisation, and whole market makers that match orders directly. It's a highly fragmented market where one additional exchange will have no substantial impact.
One exchange in a failed, fascist state is a bit different.
Do you mean Texas? Surely not, but worth checking.
A good overview of the flow of volume through these various venues can be found here. Bottom line - there are more than two exchanges.
https://www.cboe.com/us/equities/market_share/
More than that, London and Tokyo both have well known exchanges, and large US companies are often listed on both of those as well. If you tried to tell me that no other country has an exchange I'd call you a lair without bothering to fact check you. (My impression is New York, London, and Tokyo are the big ones that matter in the world and everything else is a me too - but in their niche/country they may still be a big deal)
Most smaller companies are just listing on something like NASDAQ, which isn't confined to a city. With modern computers the idea of an exchange in a city is not nearly as useful as it was 150 years ago.
HK as well
NYSE, NASDAQ, but also AMEX…
When you can buy a Governor, you buy a Governor.
When you can buy a State, you buy a State.
When you can buy a SCOTUS Justice, you buy a SCOTUS Justice or 6.
When you can buy a POTUS, you buy a POTUS.
Elon bought them all and many of you cheer. Says more about you than Elon but speaks mountains about the core of our culture and our national ethos but mostly about how easy it is to pervert people and their false ideology with money.
What does this have to do with TXSE?
TXSE has everything to do with politics.
Isnt it amazing how few people actually pay attention let alone ask themselves "why?".
The worst part? HN users are much better educated and tend to be much smarter than the average person. If this audience is so easily manipulated, it's no wonder the larger population is being controlled by such obvious tactics.
sigh...
The "spaceman bad" crowd is so dumb that even when you're arguing something bad against spaceman they just dislike it because their shallow understanding of it is just "spaceman bad so I downvote".
If you took my comment as anything other than asking how your broad strokes trite criticism of "people in power bad" relates to TXSE, you're the one who needs some reflection. I wanted to know more about how your conspiracy laden poem directly connected to TXSE but I guess HN likes to just accept low quality content for real discussion now.
If you read my comment and replied with your reply, you didnt read my comment...
Elon has way less influence than say Peter Thiel, so this is a huge exaggeration to be honest
Which exchange do you think SpaceX will be listed?
And why is it the TXSE?
SpaceX is unlikely to be listed anywhere any time soon.
Show your work. I don't see that Musk has as much influence as people like George Soros and Rupert Murdoch.
Does Abbott know you need a stable electric grid to run a financial exchange?
Nothing to see here, no conflict of interest.