The ultimate goal of a businessman is to pursue profit.

Nowhere is this more evident than in high-frequency trading.

Every supercomputer, or mainframe, has someone pre-set an arbitrage strategy. How much difference to buy first, how much volatility to choose to enter and give up, and most importantly, the stop-loss order, which is a line set by investment institutions in order to place irrepressible losses.

As soon as it falls below this line, the computer will immediately sell the certificate of deposit, ensuring that the loss is within a certain range.

While arbitrage strategies are ever-changing, one big purpose remains the same. That is to pursue maximum profits and reduce risks as much as possible.

Specific to high-frequency trading, it is the first to discover two orders with large spreads, and complete the process of entering and exiting in an instant.

Merrill Lynch's investment division did the same.

However, when various investment institutions are staring at the same exchange, conflicts inevitably occur.

Who can find out first, who can complete the arbitrage trade first, has naturally become the most important thing.

Today, in 2003, the developing high-frequency trading has not entered the era of full competition, because the market is so large, and the number of high-frequency traders is so small, and then limited by the still underdeveloped computers and their systems, the competition is carried out in a gentle, silent way.

Whoever has a faster computing speed, who has a faster transmission speed, and who can grab the order first, will belong to whoever owns it.

In the past few months, Merrill Lynch's investment department, which is new to the industry, has not encountered too strong opponents. They sometimes miss some chances, but overall it's satisfying.

That's why Mr. Minister will take the lead in taking Catherine to see the latest technology, the future direction recognized by Wall Street.

Who would have thought that in just a few minutes, three mainframe computers, with a total value of nearly 10 million US dollars, would fail one after another.

Except for a small number of white orders, there are almost few blue orders.

Most of them are orange.

The screen is full of orange, like a big leaky orange.

The minister didn't bother to wipe his sweat, sat down in his seat, and began to check the transaction records. The more he looked at it, the more frightened he became, and the ever-increasing list made him even more anxious.

Catherine didn't know why, chased into the office, and asked, "If there is no deal, there will be no deal, what does it matter?" ”

"High-frequency trading depends on the number of transactions." The minister didn't care to speak, and said after a long time: "The other party is in front of us every time, buying a profitable list, and if this continues, we will definitely be trampled on by him." ”

This is also the only way for high-frequency traders to compete at the moment.

It's just that no high-frequency trader has ever been so fast before.

"So the trader is so useless?" Catherine was referring to the Georgians she valued.

"It's not his problem." The minister said to himself as he said, "No." ”

"What's wrong?"

"Their reaction time is too fast, and it's not the time to take orders, I checked the parallel service providers of the New York Stock Exchange, and there is no ...... It's more like the speed of analysis -- what a good computer ...... this."

Marker suggested, "Could it be their software strategy?" ”

The minister suddenly came to his senses, thinking that Catherine also had a time when she was not looking for a straw bale, and asked, "What do you say?" ”

"I don't know, but I think computers are so expensive, but if you can use a good strategy to fool you or something, and take care of your own business...... Maybe it's just the idea of a few geniuses......"

Marc doesn't really know how to use computers at all, as he appears.

In fact, he studied finance in Germany for two years before being sent to the United States to complete the Vatican's layout in the financial markets.

So although he made suggestions, he couldn't say much.

The minister, disappointed, looked back at the screen.

Mark, however, trusted his own judgment, and pretended to go to the bathroom, and secretly asked the Holy See inside.

For humanity on the planet, Wall Street affects everyone. Even the villagers in the remote and impoverished mountainous areas who have never left the county are exploited by them, not to mention the huge Holy See organization.

The numbers on the screen are still refreshing.

Just like the account of Golden Resources International.

The orange scale gradually expands until it covers all the colors on the screen.

The minister immediately made a decision and gave up: "Exit the New York Stock Exchange, now." ”

"We still have 270,000 orders left unsold." The trader immediately roared. Since the orange swipe, some of their original arbitrage lists have also been stranded in their hands because they were preempted by the other party.

For high-frequency traders, this is simply the worst disaster.

"Stop loss." The minister sat down in his chair with a butt of words.

At least five minutes later, he "exhaled" and said with a wry smile: "Catherine, let you laugh, I'm afraid I lost at least $500,000 today." ”

The loss is so small thanks to the low risk of high-frequency trading, unless the market is unnaturally volatile, it will naturally bring a single low risk due to the low profit of a single transaction.

The minister has been fighting Wall Street for many years, and despite his gaffes, he still quickly adjusted his mood. Compared with the loss, the decision to withdraw from the New York Stock Exchange is more significant, and I am afraid that tomorrow's board of directors will have corresponding questions.

Catherine was surprised, but smiled and comforted: "You make so much money for the company every year, it's normal to have a little accident." ”

It's a beautiful thing to say, in his consciousness, he really didn't take the $500,000 to heart, just the money for a yacht.

The minister also seemed to be full of strength again, and nodded heavily: "A list, holding it for more than 15 seconds will have a huge risk, the market opportunity is fleeting, and the same is true for arbitrage opportunities." ”

He clicked on the name of Jinyuan International on the screen and said, "They're going to eat the New York Stock Exchange clean." ”

"Eat clean?"

"With their speed, I'm afraid they can change hands every 10 seconds." The minister shook his head and smiled, and said, "I think they are specializing in the New York Stock Exchange, as long as we keep our status today and don't make mistakes, we all have to be orange." ”

"The exchange doesn't care?"

"Look. That group of politicians, we can't afford to wait tomorrow. After the minister finished speaking, he yelled: "Do NASDAQ today, Tom will go talk to Chicago, and we will enter tomorrow." ”

Traders continue to get busy.

The minister stared at the computer screen, checking something from time to time.

Marc casually walked behind him and saw that the content inside was indeed Jinyuan International.

High-frequency traders are not mysterious people, and they have corresponding filings on the exchange, as well as a variable amount of information. Banks will collect more comprehensively, even including the company's financial status on a day-to-day basis, but this information is not readily available.

Although in the eyes of most Chinese, if you can earn $1 million a day, I am afraid that I can't wait to hide on Mars and not be discovered. But on Wall Street, there are a lot of traders who make $1 million a day, let alone bosses and institutions.

Those math geniuses who graduated from Yale and MIT look stupid like common brain-dead people, but the various financial derivatives they invent every year bring a lot of money to the entire market, and of course, they also bring tens of millions of salary returns.

In this world of gold, information is the most valuable and least valuable thing.

After about 10 minutes, the Georgia boy said loudly: "Sir, the trading strategy has been changed again, priority is given to the NASDAQ, 6 priority levels of the NYSE are lowered, and the countdown is 10 seconds to switch, 9 seconds to switch, 8 seconds to switch......"

"I'll see." The minister closed the page of Jinyuan International, closed his eyes and calmed down for a moment before continuing to look at the newly changed trading strategy.

"7 seconds, 6 seconds......" The Georgian boys were still counting, and they weren't going to waste a moment of time in their race against the clock unless they were given a clear stop order.

The minister remained silent.

Counting down to 0, the traders nervous for a moment and then relaxed again.

Then, it's about the computer.

What they have to do is react quickly when the computer encounters something other than the mathematical model. Just like that.

The orange on the big screen was gradually brushed away, less and less, until it was no longer visible, and some beautiful blues began to appear, making everyone happy.

Seeing that the minister's expression had been serious, Marker couldn't help asking, "Are you worried that they will also enter the NASDAQ?" ”

"They're definitely going to get in." The minister didn't have any ill feelings towards it, and nodded to the screen and said: "Their bank is a Mellon national, with 265 times leverage, and it is estimated that the principal is not too high. ”

Marker suddenly understood and asked, "How much do you estimate the total amount of money they have in the market?" ”

Although he studied finance for two years, he certainly couldn't compare to the old traders at Merrill Lynch.

"Between 200 million and 1.5 billion." The Minister gave a very broad figure, but it was due to the problem of the utilization of funds.

However, for them, the difference between 200 million and 1.5 billion is not much. According to the calculation of 265 times leverage, it is only 750,000 to 5.6 million.

Marc immediately concluded, "A small new company? ”

"That's not a small thing. They don't know that the supercomputers they use cost tens of millions, maybe hundreds of millions of dollars. The minister smiled like a crayfish, his tossed hair scribbling in the air like claws.

Hearing hundreds of millions of dollars, Mark's eyelids jumped.

He glanced at Catherine, who was flirting with the Georgian boy, and said in a fast and soft tone, "Then if they have 100 million dollars, won't they be able to sweep New York?" ”

"It's enough to sweep North America." After the minister finished speaking, he grabbed the phone and said, "I'm sorry, I want to talk to the guys at Mellon Bank." ”

As the investment arm of a bank, access to inside information is almost a secret that is not open to the public.

Marc smiled and left, but his mind was turned upside down.

$100 million in supercomputers and $5.6 million in principal, mixed together. He naturally came to the conclusion that there was no such thing as a $100 million supercomputer, and that it must be a small company that had invented some particular trading strategy, just as high-frequency trading had been invented.

If Golden Resources International is a well-known investment bank, Marker may think that this kind of trading strategy is only suitable for small amounts of capital.

But in reality, he trusts his own judgment more.

"I want to get it." Marc made a decision at once, and in his opinion, this was probably the biggest gain he had gained from being around Catherine.

……

(To be continued)