this post was submitted on 17 Nov 2025
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[–] sp3ctr4l@lemmy.dbzer0.com 1 points 22 hours ago* (last edited 22 hours ago)

HFTs initially existed before AI, they were triggered by what we would now call basically complex, but 'dumb' condition sets.

Imagine a cluster fuck nightmare of nested conditonal IF THEN ELSEIF type shit.

They only work because the bigboy trading firms literally have lower latency, lower ping to the actual stock market servers themselves, than anyone else, because they pay for it.

This allows them to do a whole bunch of what should probably be illegal shit, such as effectivelt slightly changing the price someone else is going to buy or sell at, in between the time they click 'execute trade' and the time the trade actually executes.

Apply leverage into that kind of pseudo sort of arbitrage as you are comfortable with, and may the speediest fiber line win!

This would be one of the few topics I'd suggest you look at ZeroHedge for, they had actually very robust technical coverage of the Flash Crash back around the GFC.

That was basicslly caused by some of these dumb HFT algos amplifying each other, untill they started breaking things, because they were not coded very well.

They apparently did not realize they were basically making extremely complex PID controllers, that they were making things that, when a bunch of them existed in the same market, would basically cause cascade and crash effects, feedback.