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Wall St. Trading Servers To Power Off-Hour Clouds?

timothy posted more than 4 years ago | from the keep-those-roles-separate-please dept.

The Almighty Buck 208

miller60 writes "As cloud computing gains traction, some Wall Street firms running armadas of servers to power high-frequency trading operations are contemplating leasing out their excess computing capacity after the trading day ends at 4 p.m. 'Once 4:30 rolls around, we don't need those machines,' said one CTO of a market data firm. 'There may be an opportunity there.' A similar revelation led to the creation of the cloud computing operation at Amazon.com, which built its infrastructure to handle peak Christmas-season loads that lasted just a few weeks each year."

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208 comments

Is This Secure? (5, Interesting)

WrongSizeGlass (838941) | more than 4 years ago | (#31766808)

I wonder if this poses any security concerns or problems? Is letting 'cloud users' access the servers that run out financial markets really a good idea?

Re:Is This Secure? (2, Interesting)

DJoffe (1747746) | more than 4 years ago | (#31766872)

Is letting 'cloud users' access the servers that run out financial markets really a good idea?

No.

Re:Is This Secure? (2, Informative)

toastar (573882) | more than 4 years ago | (#31767288)

Is letting 'cloud users' access the servers that run out financial markets really a good idea?

No.

Citation needed.

The NAS and compute cores just need to be separate systems

Re:Is This Secure? (2, Informative)

c0d3g33k (102699) | more than 4 years ago | (#31767378)

Is letting 'cloud users' access the servers that run out financial markets really a good idea?

No.

Citation needed.

http://www.answers.com/topic/common-sense [answers.com]

Re:Is This Secure? (2, Informative)

LostCluster (625375) | more than 4 years ago | (#31766886)

We've already got Virutal Machine tech and several other ways of saying "Don't cross this line!" so unless it's implemented by an idiot I'd say we'll be okay.

Re:Is This Secure? (5, Insightful)

sopssa (1498795) | more than 4 years ago | (#31766996)

But Virtual Machine's are only as good as they're designed. Even the most known and biggest vendor VMWare has had serious bug and exploits in their software. For one example see this [softpedia.com] , which let an exe running in the guest OS exploit a vulnerability in the VM code to get code run in the host OS. A serious security risk, especially when were talking about Wall Street. Even getting an access to their internal network opens new possibilities.

Just because of this I think it's a stupid idea. Even more so because the gain is not really that much, but it can be really destructive. Someone will find a way to exploit it.

Re:Is This Secure? (2, Interesting)

icebraining (1313345) | more than 4 years ago | (#31767756)

IANASA*, but wouldn't putting the data servers (DB servers?) in separate machines and physically disconnecting the power before allowing access to the other machines be enough?

* I Am Not A Sys Admin

Re:Is This Secure? (3, Insightful)

Hooya (518216) | more than 4 years ago | (#31767962)

You could have the exploit install something into the host OS and have it run when the regular stuff is back on and connected.

Re:Is This Secure? (1)

cr_nucleus (518205) | more than 4 years ago | (#31767968)

IANASA*, but wouldn't putting the data servers (DB servers?) in separate machines and physically disconnecting the power before allowing access to the other machines be enough?

It wouldn't as a compromised machine would just need to wait until the db gets back online...

Re:Is This Secure? (4, Insightful)

Huh? (105485) | more than 4 years ago | (#31767186)

I could see this being useful as some sort of "private" cloud during off hours (i.e. selling time to banks for batch and accrual operations...etc), but allowing the unwashed masses access to the underlying infrastructure of something as important as financial trading just seems like a recipe for a security disaster.

Re:Is This Secure? (0)

Anonymous Coward | more than 4 years ago | (#31767404)

Because a bank could never profit off of something like a trojan that reports all of the pending transactions to them in real time.

I've gotta agree with sopssa, this is the dumbest idea ever. It'll probably be implemented because that's what capitalism is all about these days: doing the stupidist shit, as long as it gets you $$$ for the quarterly report.

Re:Is This Secure? (0)

Anonymous Coward | more than 4 years ago | (#31767910)

It'll probably be implemented because that's what capitalism is all about these days: doing the stupidist shit, as long as it gets you $$$ for the quarterly report.

"These days"? What else would capitalism be?

Re:Is This Secure? (2, Insightful)

Anonymous Coward | more than 4 years ago | (#31766972)

I wonder if this poses any security concerns or problems? Is letting 'cloud users' access the servers that run out financial markets really a good idea?

You pose a good question. The answer is: It's all in the implementation.

a. What do these wall-street computers do? Seriously. Do these servers store data about stocks? Are they merely high throughput, low latency information distribution machines? In order to figure out if it's a security threat, we need these answers

If no data is being stored on these machines, then I see no reason why they can't wipe the VM and let it load up some default image. From there, it can do tons of cloud computing stuff.

But in the same regard, there have been articles on Slashdot about compromising a VM. I'm sure that it's low risk, but it would have to be a very targeted attack against a firm.

We need more data.

Re:Is This Secure? (1, Funny)

Anonymous Coward | more than 4 years ago | (#31767198)

We need more data.

I'm sure that we'll get plenty of data once someone hacks one of the servers.

Re:Is This Secure? (0)

Anonymous Coward | more than 4 years ago | (#31767524)

Ummm, yes, this can certainly be made secure. It's not like you can run an VM instance on amazonEC2 and access the credit card I used to buy that book yesterday. If you really wanted, you could physically unmount the filesystem containing your secure data every night. Utilization of the CPU cycles on a machine does not imply that the data on that machine can be read.

Re:Is This Secure? (1)

temolate (834784) | more than 4 years ago | (#31767684)

they could keep all data on a SAN during the day and power that off (and/or physically disconnect it) and then keep all their client data on a separate SAN (and have that off/disconnected during the day). and it's not like that would be an *extra* SAN cost because they're going to have to keep the client's data somewhere either way.

Re:Is This Secure? (0)

Anonymous Coward | more than 4 years ago | (#31768034)

Yes it is. Now anybody can crash the stock market, not just the Prez or Wall Street guys.

Security nightmare (3, Insightful)

UndyingShadow (867720) | more than 4 years ago | (#31766830)

This seems like a security nightmare waiting to happen. I understand everything would likely be virtualized, but it just makes me nervous that you would be able to rent time on servers that interact with the stock market, especially considering how panicky the market can be, and how badly everyone suffers when it does panic.

Cost to Society (3, Insightful)

Oxford_Comma_Lover (1679530) | more than 4 years ago | (#31767054)

Yes. If Amazon went down tomorrow and never came back, society would be fine. If the stock exchange were taken over by malicious but hidden computer software for months, and then finally was taken down, the damage to society would be MUCH more severe. It's not just a way of exchanging everything, it's a way of establishing who owns what. If suddenly nobody knows who really owns every stock that's traded in the last six months, we've got a major frikkin problem. We shouldn't, maybe, but we do because money is an illusion.

Re:Cost to Society (2, Insightful)

LostCluster (625375) | more than 4 years ago | (#31767338)

A stock-trading unauthorized program is the nightmare of financial IT so there's frequent checks to make sure that doesn't happen. If a financial company doesn't know what it owns, it doesn't know much at all.

If something is being artificially inflated or deflated there will be people asking "Why?". A human rogue trader, trading with money that isn't his and doing something other than what the money's owner has authorized him to do is an international story when one happens. A software rogue trader wouldn't last very long.

Re:Cost to Society (2, Insightful)

BitZtream (692029) | more than 4 years ago | (#31767848)

the damage to society would be MUCH more severe

Only if someone told society that it was gone. The stock market effects a few select people drastically, but really has little influence on our daily lives in and of itself.

The panic and fear generated as a result of a market failure as people start hording for no reason other than CNN or FOX said the world was coming to an end are what causes problems.

If it simply ceased to exist the world would change very little. Stocks are based on what someone thinks a stock is worth, its precieved value.

Lets face it, I own more than a few shares of Apple, but until I sell them they are barely useful for starting a fire. If the stock market ceased to exist, their actual value would be identical to what it is now.

Re:Cost to Society (1)

interkin3tic (1469267) | more than 4 years ago | (#31767888)

We shouldn't, maybe, but we do because money is an illusion.

You mean how you can fold bills just right and tilt it and it looks like the president is smiling or frowning???

Re:Cost to Society (1)

Jenming (37265) | more than 4 years ago | (#31768126)

The servers in question are not running the stock exchange. Rather they are owned by some bank to operate one of their trading strategies. That bank possibly could lose some money and if f it was a big enough amount of money it could effect the rest of the stock market, however its not like compromising the stock exchange as a whole.

Re:Security nightmare (0)

Anonymous Coward | more than 4 years ago | (#31767566)

What's to be nervous about? The stock market and high frequency trading is a criminal enterprise anyway.

Re:Security nightmare (2, Insightful)

Tanktalus (794810) | more than 4 years ago | (#31768184)

There is no such thing as perfectly-secure. They could already be hacked today, this isn't changing that. It merely introduces a new attack vector: the VM sandbox.

If the ROI is there, this can be mitigated. If they create a cloud using their existing hardware, and move their own apps into a priority cloud on that hardware, and sell the excess CPU time, then not only does an attacker need to figure out what VM they are in, and what, if any, vulnerabilities there are in that VM that they can exploit, they have to cause the parent virtual machine (let's face it, there's no reason why a virtual cloud needs to be sitting on physical hardware directly - and, for this purpose, AIX, Sun, and the mainframe are already on virtual machines anyway) to run arbitrary code that would then go and find other virtual machines, find the one of interest, and then cause THAT virtual machine to give up information.

Breaking IN to a virtual machine might prove more difficult than breaking OUT of a virtual machine. And you may need to break in to all of them just to find the one you need.

Security by obscurity isn't the same as no security. It's not perfect, but it does reduce the exposure.

And, besides, maybe they only sell CPU time to other corporations where they can better track who has access to what, with passworded VPNs that only go directly to the cloud that the password given grants access to.

It's all about ROI, and whether they can make it work while improving their overall financial picture. I bet they can. I'm not betting whether they do or not.

Not a new idea... (5, Interesting)

LostCluster (625375) | more than 4 years ago | (#31766834)

Compuserve was founded by a life insurance company to make a consumer service run on their business systems with the expectation that the consumers would use it during non-working hours.

When it comes down to it, nobody needs their clock cycles 24/7 at even load, even though that's what computers are designed to do. Shared services for the win!

Re:Not a new idea... (2, Informative)

geekoid (135745) | more than 4 years ago | (#31767112)

" nobody needs their clock cycles 24/7"
What about computers the service cloud computing?

Re:Not a new idea... (1, Funny)

Anonymous Coward | more than 4 years ago | (#31767562)

What about computers the service cloud computing?

What about sentences the make sense?

Re:Not a new idea... (0, Redundant)

WrongSizeGlass (838941) | more than 4 years ago | (#31767792)

What about computers the service cloud computing?

What about sentences the make sense?

Here, try this: What about computers that service cloud computing?

So what they are saying is (0)

Monkeedude1212 (1560403) | more than 4 years ago | (#31766846)

The cost of renting the server farm has to be twice as much as the savings they'd have if they just powered them off.

Maybe even a little more, so that someone makes a profit.

I still don't understand why the Stock Market can't run 24/7.

Re:So what they are saying is (0)

Anonymous Coward | more than 4 years ago | (#31766884)

Analysts need their beauty sleep.

Re:So what they are saying is (1)

Midnight Thunder (17205) | more than 4 years ago | (#31767106)

I still don't understand why the Stock Market can't run 24/7.

Trading is still done by people, who have a horrible tendency to want to do things like eat, sleep and such forth.

Re:So what they are saying is (2, Informative)

LostCluster (625375) | more than 4 years ago | (#31767226)

All trading instructions, no matter how technologically implemented, come from people. Somebody has to write and fund the program that says "Buy XXXX when its price reaches $Y" even if they're not attending it at the time it happens.

Just look at what a mess after-hours markets are. Sometimes they're offering tomorrow's price today, but sometimes they get bent out of shape. Don't you dare buy a stock Jim Cramer promotes on Mad Money in after hours... somebody who owns that stock would love to jack up the price on you. Worse yet, somebody can short that stock and likely have a profit by 9:30am the next business morning.

If you want 24/7 markets, try currency trading. The US Dollar is up for trades at nearly all hours of the day.

Re:So what they are saying is (4, Interesting)

ottothecow (600101) | more than 4 years ago | (#31767150)

It can run 24/7...we just don't want it to.

In fact, with after hours trading and foreign markets, it really does run 24/7, just not on the floor of the NYSE (and not as liquid).

I would posit that a good reason for this might be that the stock market is already panicky enough and being closed for most of the 24 hour day gives people a little more time to thing about what is going on. A perfect example is companies that release earnings and other important news after the closing bell. It gives people time to process the information rather than giving the fastest guy a chance to make a quick profit. For the *real* purpose of the stock exchange, it does not need to be open. If your goal is to raise capital for a business (or invest in one) rather than speculate and day-trade, the current market hours are just fine.

Re:So what they are saying is (1)

ragethehotey (1304253) | more than 4 years ago | (#31767214)

I still don't understand why the Stock Market can't run 24/7.

because then, computerized trading systems would have a distinct advantage over humans.

Re:So what they are saying is (1)

Lunix Nutcase (1092239) | more than 4 years ago | (#31768032)

You act as if they don't already.

Whatcouldpossiblygowrong? (0)

Anonymous Coward | more than 4 years ago | (#31766854)

Nothing like lending out some hardware to save a few $$ but potentially risking your account(s) to some haxors? As to saying virtual machines can't be haxored, that is incorrect. They are simply more difficult to get to.

This idea is similar to leasing out IRS or NSA free-computer time in the off-hours. After all, IRS peak is at tax time?

A better idea for them maybe just to turn the machines off when not in use???? I know, it's radical.

heh...yeah. (4, Funny)

Pojut (1027544) | more than 4 years ago | (#31766862)

$20 says this idea was cooked up by someone who heard about "cloud computing" on the radio while in his cushy office, signing official looking papers and making a big fuss about "revenue".

What could possibly go wrong... (0)

Anonymous Coward | more than 4 years ago | (#31766866)

Oh yeah, that sounds... like a disaster waiting to happen.

Wow (3, Insightful)

dachshund (300733) | more than 4 years ago | (#31766870)

I sure hope Wall Street is utterly confident in the security of their operating systems, VMs, low-level peripheral firmware, etc. Because if they're not absolutely confident, they should treat all of those machines as potentially untrusted from the moment they open them up to the world. This holds even if they constantly re-image.

When you're talking about the kind of money Wall Street stands to lose from a clever security breach, no amount of paranoia is too ridiculous.

Re:Wow (0)

Anonymous Coward | more than 4 years ago | (#31767328)

Yes, the firmware is the concern. Obviously you could isolate storage in many datacenter environments, e.g. turn off production market SAN links to the blades and turn on a different "cloud" SAN instead. But if guest software has even a small chance of infecting flash-writable firmware on any part of the host or peripherals, it could impact future boots when the market SAN is connected back in.

When my software company was negotiating with a big financial company for some datacenter automation business, they already knew they shouldn't trust hypervisors, VLAN, etc. as real isolation. They knew to run silos of the datacenter partitioned for only equivalent trust applications.

Get rid of them entirely (4, Insightful)

TubeSteak (669689) | more than 4 years ago | (#31766900)

Not to derail the conversation, but high frequency trading doesn't contribute much to the stock market's ability to set optimal prices.

What actually happens is that high frequency traders squeeze in while prices are moving and they siphon off money. Neither the original seller, nor the original buyer gets the best price, and the high frequency traders make a mint.

Re:Get rid of them entirely (3, Interesting)

wjousts (1529427) | more than 4 years ago | (#31767096)

Exactly this. High frequency trading really perverts what the markets are for. Make a law that you have to hold a stock for at least a day (maybe even just an hour would work) and you might restore some sanity to the market as well as giving those traders who don't have server farms running advanced trading algorithms a fighting chance.

Re:Get rid of them entirely (1)

Herkum01 (592704) | more than 4 years ago | (#31767622)

I had thought about this for a few years and had two ideas on it. The first was like yours, the person has to hold onto the stock for a set period of time.

The second was don't display any information about trades during the day, just accumulate orders. At the end of the day match up the buy and sell orders.

They need to stop rewarding this stock exchanges on the number of trades and instead focus on providing stability for the fair pricing of stock for companies.

Re:Get rid of them entirely (1)

aamcf (651492) | more than 4 years ago | (#31768610)

If a company doesn't like the way a particular stock market works they can just go and get listed on another one. If an investor doesn't like the way a particular stock market works they can just invest elsewhere.

Re:Get rid of them entirely (4, Interesting)

TubeSteak (669689) | more than 4 years ago | (#31767634)

Exactly this. High frequency trading really perverts what the markets are for. Make a law that you have to hold a stock for at least a day (maybe even just an hour would work) and you might restore some sanity to the market as well as giving those traders who don't have server farms running advanced trading algorithms a fighting chance.

You'd only have to slow them down by a second (literally 1 second) to completely bring their business model to a halt.

HFTs buy zero second data feeds from an exchange and some exchanges actually sell pre-zero-sec access.
Meaning that the HFTs can see trades a few hundred milliseconds before they post, allowing the trader to sneak in and buy/sell.
The SEC is looking to ban the practice, but hasn't gotten around to doing so yet.

Re:Get rid of them entirely (1)

aamcf (651492) | more than 4 years ago | (#31768660)

Why should the practice be banned? There has always been an advantage to getting certain information first. If your trading strategy depends on you being first to have some information, then either pay to be among the first to get it, or change strategy.

Re:Get rid of them entirely (2, Interesting)

jackchance (947926) | more than 4 years ago | (#31767694)

Make a law that you have to hold a stock for at least a day

That's an interesting idea. But it's obviously flawed. Let's say i buy some pharma stock at 9am. At 12 pm the FDA announces that they have found that pharma's main product to be dangerous. Should I not be allowed to sell?

I would argue that derivative speculation and complicated leveraging packages are what make the market insane.
Other people [bloggingstocks.com] have made similar [bizcentral.org] comments.

Re:Get rid of them entirely (0)

Anonymous Coward | more than 4 years ago | (#31768298)

A better idea is simply to impose a very small tax on financial transactions. Even a tax of 0.1%, which will be unnoticeable to long-term buyers, will eliminate this high-speed trading business.

Re:Get rid of them entirely (1)

aamcf (651492) | more than 4 years ago | (#31768688)

But why eliminate it at all? Why ban a practice that increases liquidity?

Re:Get rid of them entirely (1)

aamcf (651492) | more than 4 years ago | (#31768590)

How would this work for the market makers et al? Sounds like your suggestion would make market making more difficult, thus reducing liquidity, and thus reducing prices.

Re:Get rid of them entirely (2, Insightful)

LostCluster (625375) | more than 4 years ago | (#31767142)

Yep. Market regulations are all about a "level playing field"... no using information others can't get yet for trades. Just ask Martha Stewart.

I really think a rate limit that makes high-frequency trading impossible is a good idea. Just like the TV ad goes, why do you want to sell something you just bought in an auction? Everybody in the room already said they wouldn't pay what you paid.

Re:Get rid of them entirely (1)

aamcf (651492) | more than 4 years ago | (#31768712)

The information published on market data feeds is public information; it is not insider trading. Everyone is on a level playing field. It is just some people can run faster.

Re:Get rid of them entirely (0)

Anonymous Coward | more than 4 years ago | (#31768842)

Yep. Market regulations are all about a "level playing field"... no using information others can't get yet for trades. Just ask Martha Stewart.

Actually, after a thorough investigation, there was ZERO evidence that Martha Stewart engaged in insider trading. She was investigated because her broker was investigated.

Martha Stewart was convicted & went to jail for LYING TO INVESTIGATORS WHILE BEING INVESTIGATED FOR INSIDER TRADING.

Martha Stewart was a victim of the anti-Wall Street frenzy. The amount of stock in Martha Stewart's case was about $50,000, but investigators couldn't be bothered to look at real crooks.

The moral of the story? You have the right to remain silent. USE IT!

Re:Get rid of them entirely (2, Interesting)

Anonymous Coward | more than 4 years ago | (#31767218)

Not really. Someone has to quote a bid and an ask all day long, quickly so you get your shares when you want. And with competition between high frequency players trying to extract a spread or rebate, you get some pretty tight spreads giving you a good execution price without you having to pay the hidden cost of the spread. Most heavy volume stocks are a penny wide.

Second, no one can "siphon off" money without taking a risk. Prices moving don't imply "free money" for the taking and there is substantial risk involved. No one in the market gets compensated for zero risk. It's like any other business where people take risks with their capital to provide you with a service. In this case, that service is providing you with liquidity.

Re:Get rid of them entirely (1)

AcidPenguin9873 (911493) | more than 4 years ago | (#31768670)

I have never understood this desire for a continuous 1 cent spread. I think HFT use that argument to justify their existence. The market does not require it.

Market makers set bid and ask prices, and when we trade stock, the market maker makes the spread. If HFT weren't there, market makers would probably make more money due to a wider spread, but I'd be okay with that since they are the ones REALLY providing liquidity.

Second, no one can "siphon off" money without taking a risk.

Bzzt. The whole point of HFT is to exploit microsecond-long arbitrage opportunities, which are by definition zero-risk.

Re:Get rid of them entirely (1)

aamcf (651492) | more than 4 years ago | (#31768570)

They might not get the best price, but they get the price they are willing to sell (or buy) at. If you don't want to sell your stock at $10, then don't. Nobody is forcing you to.

It might seem odd to us, but the reason that high-frequency trading works is because to someone, somewhere thinks that it is better to buy XYZ at $10 now rather than $9.99 at some unknown time in the future.

Re:Get rid of them entirely (1)

maxume (22995) | more than 4 years ago | (#31768900)

If they aren't contributing much information, then, by definition, they aren't taking much of the money either.

If it is really a huge problem, buyers and sellers will move to trading systems with higher per-trade fees, or with promises about the nature of the other party in each trade.

"Once 4:30 rolls around..." (4, Insightful)

mcmonkey (96054) | more than 4 years ago | (#31766910)

Said the CTO who is now looking for a job.

NYSE closes at 4:30. But there are other markets. And the data flows 24/7.

There is no reason for these systems to have spare cycles.

Re:"Once 4:30 rolls around..." (1)

MobileTatsu-NJG (946591) | more than 4 years ago | (#31766982)

Are you one of the guys that maintains those machines?

Re:"Once 4:30 rolls around..." (1)

LostCluster (625375) | more than 4 years ago | (#31766992)

The servers that run the global markets are, well, global. There's no need for a trading firm to have resources in NYC after business hours, because the people and the computers that do things on the markets elsewhere are, well, elsewhere.

Re:"Once 4:30 rolls around..." (3, Informative)

keithpreston (865880) | more than 4 years ago | (#31767008)

Location is the reason these system have spare cycles. They build data centers across the street from the market so that they have the lowest latency access to the market (it matters for high frequency trading). A data center on Wall Street is useless for other markets.

Re:"Once 4:30 rolls around..." (0)

Anonymous Coward | more than 4 years ago | (#31767144)

We don't let the facts get in the way of a good post round these parts, sir.

Re:"Once 4:30 rolls around..." (1)

LWATCDR (28044) | more than 4 years ago | (#31767170)

That has got to be the most expensive data center for m^2 on the planet.
They don't care about power or heat it all would comedown to foot print.
I bet IBM sells a lot of POWER cpus there.

Re:"Once 4:30 rolls around..." (0)

Anonymous Coward | more than 4 years ago | (#31767018)

Other markets have servers to handle their trades. These servers function to handle high frequency trading when THIS market is open.

Even from TFS you can infer that there is downtime. Just eating up a data feed from another server wouldnt consume massive processing power.

Do not pass go, do not collect $200.

Re:"Once 4:30 rolls around..." (1)

wjousts (1529427) | more than 4 years ago | (#31767034)

I had a very similar thought. The obvious way to make use of the servers during hours when the markets are closed is to use them in other markets that are open. For example, trade the NYSE during the day and trade the Asian stock markets at night. Synergy!

Re:"Once 4:30 rolls around..." (5, Interesting)

eastlight_jim (1070084) | more than 4 years ago | (#31767204)

Believe it or not, trading by computer has now become so quick that companies vie for server space closer and closer to the place where trades are taking place. This article" even goes as far as suggesting that a 1 millisecond advantage in trading applications can be worth $100 million a year to a major brokerage firm with such low-latency trading becoming more common. [datacenterknowledge.com]

I think the ping to Asia may be a bit more than that!

Re:"Once 4:30 rolls around..." (3, Informative)

mystik (38627) | more than 4 years ago | (#31767210)

These High-Frequency trading systems require sub-second responses from the market servers. They're usually collocated in the same structure as the marketing servers, and firms pay handsomely for that kind of space and network access.

When that market closes, you don't want these machines trading overseas, the latency to reach those servers would negate the entire purpose of these machines.

Re:"Once 4:30 rolls around..." (1, Funny)

Anonymous Coward | more than 4 years ago | (#31768272)

So of course, the logical answer is to put these servers into a containerized data center, launched into low earth orbit from a giant railgun, and splashing down in the harbor of Hong Kong or some other financial center. Just do this twice a day, back and forth to New York, and they'll always be co-located during market hours.

Then: profit!

Re:"Once 4:30 rolls around..." (2, Insightful)

NeumannCons (798322) | more than 4 years ago | (#31767232)

It's my understanding that the high frequency traders need machines that are physically near to the market they're trading stocks on to minimize hops, lag, etc. and to chronologically beat everyone else who's trying to do the same. Everything is built to make transactions that can be executed almost immediately to take advantage of stocks going up or down before everyone else does thereby altering prices.

I'm going to guess that trying to play that game for servers overseas where lag can be measured in seconds won't work when your competition has servers located in the same building the market is in.

Re:"Once 4:30 rolls around..." (1)

toastar (573882) | more than 4 years ago | (#31767358)

Said the CTO who is now looking for a job.

NYSE closes at 4:30. But there are other markets. And the data flows 24/7.

There is no reason for these systems to have spare cycles.

So your going to try to make high frequency trades that require ultra low latency in Japan with your servers that are in new york?

I Prefer To Do My Off Hour Computing... (0)

Anonymous Coward | more than 4 years ago | (#31767028)

by running an extension cord out to the sidewalk and running my batch jobs on a PC sitting outside of my house. That way, I stand a chance of actually seeing if anyone is copying my stuff off if I wake up in the middle of the night to get a glass of water.

I wonder if he bothered to (3, Funny)

geekoid (135745) | more than 4 years ago | (#31767068)

consult with his technical people.

What am I thinking, Of course not.

Re:I wonder if he bothered to (1)

sunderland56 (621843) | more than 4 years ago | (#31768494)

Especially since these are not particularly fast computers. They are optimized to do financial transactions - something which requires incredibly fast I/O, but generally only requires a single addition per transaction.

So, if your cloud requires blindingly fast I/O, great (but then the NYSE would need to buy a bunch more disks). If your cloud requires some compute power, these may not be ideal machines.

Veeeeery bad idea (1)

Angst Badger (8636) | more than 4 years ago | (#31767154)

I'm sure that there are lots of people who would like to run jobs on machines that normally process billions of dollars in transactions.

Of course, a certain percentage of them are going to be probing for security holes so they can steal financial data, but no worries -- the government will bail them out, right?

destroy them (5, Interesting)

roman_mir (125474) | more than 4 years ago | (#31767176)

I dream that this entire high frequency scam is declared illegal and all involved are placed where they belong with all of their property confiscated.

Here is what happens when HFT is done: 2 parties agree on a price, the HFT meddles with in a way, that takes out money from the transaction, so the buyer sells lower and the seller buys higher. That little bit of difference is stolen by HFT.

These are thieves, we are discussing here, understand that. So they found a way to make some profit on their infrastructure? Well, great for them. 4,000,000 transactions per second they are talking about for one shop. That's 4,000,000 thefts per second.

Re:destroy them (3, Interesting)

roman_mir (125474) | more than 4 years ago | (#31767252)

so the buyer sells lower and the seller buys higher.

- a typo obviously. Buyer buys higher and seller sells lower than anticipated. The HFT transaction takes the edges. There is no value for economy other than the bank account of the HFT transaction owner becomes bigger. They didn't care about what was bought, what was sold, they have no idea what is happening with what is bought/sold, they are taking money from participants who may, in theory, have done something productive with it. Of-course that's not what happens. Just understand, that many people who own mutual funds and other investments are the suckers in this game of stealing the penny from the 'tray for everyone', to put in Office Space terms, so that /. would understand.

Re:destroy them (1)

blahplusplus (757119) | more than 4 years ago | (#31767604)

I would argue that the stock market itself is unproductive to how a healthy business runs, the constant desire for growth is actually _unhealthy_ it inspires the constant pump and dump mentality of a business's employee's. You see this especially in the game's industry where entire teams are laid off and their skills go unused.

Re:destroy them (1)

roman_mir (125474) | more than 4 years ago | (#31768246)

If you have a $100 and you are holding it in paper at home for 10 years, then it means that in this time you have lost at least half of the purchasing value of your paper, so your purchase power has gone down from $100 to $50. That is quite a fair estimate of inflation in normal conditions. Question is: are you OK with it?

Due to the fact that there is always someone who is willing to do extra work to live better than the rest, some new money will be created from the value of the work that is done by these individuals. Of-course what happens now is that the brightest and best connected/educated individuals have figured out that the most money can be made by stealing, not by providing services that people want, and that's the problem with trading on stock market. It started as a good idea: stock released by a company to collect capital to create something of value that will pay back in dividends, instead the actual stock (the paper) itself became the product that is sold and bought, the dividends are not what is being sought. Of-course there are still long term investors, who invest into solid companies with solid products (it's Asia mostly now) and they still do get paid dividends. It really used to be the primary objective: collect money from investors now, use the money to grow business and investors get paid.

Stock market today has little to do with this idea, it is no longer relevant what the business does, how the company is doing, it is about buying and selling the paper (electronically). It is all about manipulation and shorting at this point by these market makers who have enormous power because they see all the bets.

The stock market is completely rigged right now, just like a bad casino, where the house knows all the cards in everybody's hands but it does not bet against people directly, it just gets in between a bet that is made by two parties and it covertly makes 2 other bets with these same people, but it's done so fast that these parties do not even know about it, it's like a magic trick.

In reality it should have never been allowed for private interests to control the information about everyone's bets this way without any oversight (and nobody really checks anything anymore, it is obvious that the government officials are in on it and also do not understand the game.)

It's all screwed up. The best bet at this point is to buy real things: coins, stamps, furniture, energy, canned food, whatever and to avoid wasting your money in these market conditions. This market will flop soon, it will implode because it is hollow and heavy at the same time.

Re:destroy them (1)

L3370 (1421413) | more than 4 years ago | (#31768684)

coins...ok that sounds good. They become collectibles and precious metals typically outpace inflation. But do note, if you are buying gold now you ARE buying at a peak price. That is inherently risky.
stamps...maybe
Furniture????...I never knew love seats to be an appreciating asset.
Energy and canned food? ok now you sound paranoid. We've been in economic slumps before, and I think we are strong enough to get back out. In the mean time, others will continue to make money off the atmosphere of fear.

Re:destroy them (1)

roman_mir (125474) | more than 4 years ago | (#31768802)

Furniture that is collectible obviously. Stamps also can be collectible or not, same with everything.

Whatever you are buying, my point is valid: this market is rigged and it will collapse, since it is based on free money that is printed by the Fed and that is loaned to financial firms at no cost, who turn around and play with it in various ways. The next 'bubble' is in Treasury bills (but it is all the same bubble, all the way back, the housing, the tech bubble in the nineties.) The point is that all of this is the bubble of the free money that is being given by the government to the preferred people, corporations. They are sucking out the value of whatever used to be produced and saved, they are almost done now. It will collapse and then the prices will skyrocket because the money itself will be worth no more than the silly paper it is printed on.

Food, energy, nonperishable goods, collectibles, weapons probably, any of that is better than playing in this rigged game unless you are playing with free money, unless you are the preferred financial institution and are getting free money, unless you own these HFT machines.

Re:destroy them (1)

BitZtream (692029) | more than 4 years ago | (#31767728)

Funny, our ability to use tools puts a big gap between our species and the rest.

Yet ... here you are ... pointing out how its unfair that someone uses a tool that you don't have, yet I'm sure you'd be okay with using the tools you have at your disposal for making decisions.

If you have a problem with their tools then either get their tools or make it fair on everyone by not allowing any tools.

Of course ... if you don't allow any tools then the only way to play is to actually stand on the trading floor, which is once again going to cut you out.

Lifes not fair, stop pretending it is or that it should be and you'll get a lot further in life.

The stock market is one massive money laundering scam anyway, you're an idiot if you think of it as anything more than gambling, its far too disconnected from reality to be anything else. Due to the panicky nature of people and the ability for CNN to control that panic, I'd wager there is more entropy in the stock market when its 'stable' than there is in most lotto machines.

Re:destroy them (1)

roman_mir (125474) | more than 4 years ago | (#31768870)

certainly the stocks themselves have become the products that are bought and sold and they are dipping and raising suddenly due only to the manipulation that mostly has nothing to do with the actual company behind them (unless the company is doing the manipulation of-course).

No question that the era of investors putting money into a business and getting dividends with publicly traded companies is gone, in the West at least. It is all manipulation, but HFTs are so blatant and nothing is done about it, where are the regulators? Well, they don't understand the game and the top brass is in on it.

Re:destroy them (0)

Anonymous Coward | more than 4 years ago | (#31768414)

Maybe you should think before you post. If they got 4mil thefts per second, the other participants would all be out of money in no time and then the market would completely dry up. Because, hey, it's easy money and tons of theft with no risk right? If only -- only in your bizarro world. /. should embrace HFT just on account of the number of jobs that are provided for people in IT. And don't think innovation in HFT doesn't make its way back out into the open source world, because it does -- just not openly, because no one wants to let one what they are looking at or even working with.

I welcome HFT. I -like- having less than a penny slippage when I want in and out of markets, and I want these firms to provide that to me.

Re:destroy them (0)

Anonymous Coward | more than 4 years ago | (#31768596)

Where are you getting this 4,000,000 transactions per second number from?

Citigroup is a rather high volume stock and it has a volume of ~600M shares traded a day, last I checked. They are done in round lots of 100 = ~6M transactions a day.

I think you are off by a few orders of magnitude, even if you include all of the stocks on the stock market, of which most are not suitable for HFT (not high enough volume).

Also the HFT stuff is usually sending and cancelling orders repeatedly, but I would expect it to top out at 10-100 or maybe even 1000 transactions per second, with only a tiny fraction of those actually going through as trades.

They also get liquidity rebates from the exchanges (a fee for providing liquidity), so they can buy and sell for the same price and still get paid.

Re:destroy them (1)

roman_mir (125474) | more than 4 years ago | (#31768650)

Straight from TFA, 4MILLION HFT transactions on that hardware per second. Whether all of them end up in a real purchase or a sale or whether they are done TO PUSH the prices up or down and immediately canceled, every transaction they do there is another theft.

What goes around comes around...call it GEnie. (3, Insightful)

Quarters (18322) | more than 4 years ago | (#31767266)

I guess if an idea is 20+ years old the statute of limitations has run out and someone can use it again as NEW and EXCITING.

Re:What goes around comes around...call it GEnie. (1)

BitZtream (692029) | more than 4 years ago | (#31767574)

GEnie is still around, owned by another company under some other name doing EDI for some companies that refuse to join the Internet and just use SMTP to accomplish the same thing. Its still around never the less.

Skimmers anyone? (0)

Anonymous Coward | more than 4 years ago | (#31767392)

Sounds like a great way to do the 'ol "Transfer .01 cents to my account on every trade" trick.

Y3OU FAIL IT (-1, Flamebait)

Anonymous Coward | more than 4 years ago | (#31767476)

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EC2 is because of christmas servers? (1)

euxneks (516538) | more than 4 years ago | (#31767506)

Can someone post a source for the claim that Amazon did EC2 because of Christmas time servers that are no longer in use during the year?

Re:EC2 is because of christmas servers? (2, Interesting)

Anonymous Coward | more than 4 years ago | (#31767690)

Can someone post a source for the claim that Amazon did EC2 because of Christmas time servers that are no longer in use during the year?

You'll probably get sources, as Amazon said so initially. Of course that's best forgotten now as it has become an inconvenient fact.
Notice how every Christmas their servers go down due to mysterious "hackers" poisoning their DNS server or what not. Every year - a different excuse, and every time - around Christmas.

Basically, don't use Amazon if you have mission critical processing around Christmas, or even worse, if you expect a peak around Christmas.

Awesome ... not really (1)

BitZtream (692029) | more than 4 years ago | (#31767632)

Since most computing power is needed during the business day, during the same time that they need their processing power ... it would seem they have little value in what they have to offer.

What do you do during the peak time when they don't offer you processing time?

This pretty much limits the data that can be handled on these servers to batch processing of data that doesn't have constraints on how long it can wait.

Basically its useful for low budget scientific research. Thats not saying its not very useful in that sense. Just recouping wasted CPU cycles could be great for science in general. I just don't see there being enough of a market for a stock exchange to justify the expense of running the business.

Re:Awesome ... not really (1)

BradleyUffner (103496) | more than 4 years ago | (#31767794)

Since most computing power is needed during the business day, during the same time that they need their processing power ... it would seem they have little value in what they have to offer.

unless you are on the other side of the planet, then your peek time is their down time.

Who is this Wall Street guy? (1)

alexmin (938677) | more than 4 years ago | (#31768056)

I've been in trading business for a while but never met him. Still "press" keep talking about him. Especially when it comes to getting someone to pay for something guvmint wants. Enyone met him yet?

AOL deja vu (0)

Anonymous Coward | more than 4 years ago | (#31768098)

America Online (AOL) was started in this way by Quantum Computer Services looking for a revenue stream during the night.

It Depends... (2, Interesting)

FrozenGeek (1219968) | more than 4 years ago | (#31768140)

It could be secure, given the following constraints:
1. The computers contain NO mass storage at all.
2. The mass storage is external to the computer and is disconnected from the computer during cloud computing.
3. The computer is rebooted from CD (or DVD) before and after cloud computing.
Of course, the odds on those constraints being met are pretty low if non-technical types are involved.

This won't happen (1)

L3370 (1421413) | more than 4 years ago | (#31768376)

These servers make a *ridiculous* amount of money for their owners/shareholders. Revenue from hosted services would be a drop in the bucket in comparison....no a single water molecule in a bucket. Leasing out their servers in the off hours would barely pay for the brokers cocaine-and-hookers slush fund. Hardly enough to warrant the effort and associated risk.

It seems like a novel idea, but in the end I bet it remains just that.

Wikileaks (1)

Snarf You (1285360) | more than 4 years ago | (#31768564)

This might explain how Wikileaks did it [slashdot.org] .

I, for one, would like to rent one (1)

gman003 (1693318) | more than 4 years ago | (#31768930)

It would be great for batch rendering. Sure, the hardware might not be optimized for it, but it would probably be cheaper than renting one that is. And running it during off-hours is actually a plus: set up a scene during the day, render overnight, then see the results in the morning.

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