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Comment by gd1 | Hacker News Reader

Why? What's the response time on an airbag release in an accident? On the ABS in your car? Your graphics card manages to rotate, scale, texture and shade a hundred million polygons per frame in around 1000/60 = 16ms. We're talking here about processing one UDP frame, usually under 256 bytes.

Why is this the only topic discussed by HN where technology suddenly becomes this frightening bogeyman?

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Its not the engineering, its the objective. Latency arbitrage is code-word for front running. Woops.

You'd best look up the definition of "front-running". Reacting to an event the fastest makes you the quickest behind-runner, but you're still behind. Not front-running at all. Where did you even learn this term? Are you just regurgitating something you've heard elsewhere?

Try looking up the definition of 'arbitrage'

Wtf? An example of latency arbitrage is say, two identical fungible securities listed on different exchanges. An order arrives causing the price on one exchange (A) to spike up (the event), you react after that event and buy the security on the other exchange (B). You reacted fastest to public knowledge.

Front running would be if you were say sitting on a broker desk and one of your clients rang up and said to buy lots of A. Then you put in your own buy order before the clients one hits the market. That is front-running. You got in before that knowledge become public. Do you see the difference?

An example of latency arbitrage is...

Arbitrage requires that you cross the trade. You've merely described a following Algorithm. One that leaves open long positions.

And you've merely tried to change the subject. Something can't be front-running if it happens after a publicly disseminated market event. Understood? Flash orders = front running. Trading ahead of client flow = front running. Latency arbitrage != front running. HFT market making != front running.

Arbitrage is precisely the subject. Sorry you don't understand that.

It isn't front running, stop being a dick

Actually, it is "synthetic" front running.

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