As reported by Alex Planes, if you developed a unique trading method that all but guaranteed profits if done properly, would you want to share it? Planes said he wouldn’t. he’d keep it all to himself.
Not IBM , which recently got a patent on a proprietary high-frequency trading strategy. IBM already offers technologies that help trigger-happy HFT operations shave those last microseconds off their trading times, so this might seem like a logical extension for Big Blue, and a dangerous advantage for HFT firms.
But it’s just as likely to be harmless. Planes asked us to bear with him and we’ll see why. He will even let us in on some alternatives that won’t force us to chain quants and coders to supercomputers for a tiny edge over Goldman Sachs.
HFT is really nothing more than plucking nickels out of thin air with the help of computers, making far more trades every day than any human possibly could. Every unique advantage counts. That’s why Goldman had one of its former employees prosecuted in 2009 — the company was terrified he might have taken its HFT software.