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Bot-wars and proximity

Technology brings as many problems as it solves solutions much the same way experts often confess to knowing more and more about less and less. 

As one passes through life this statement becomes more prevalent and it's no surprise that older folk are known to take less risk than younger ones who do not have the battle scars and hindsight of the veterans.

With those thoughts in mind it might well be time to contemplate what is round the corner for the algorithmic trading community...

The other day while hunting for a whiteboard on eBay I came across a new 3rd party service for eBay buyers: Auction Sniper.  Essentially it's a software-as-a-service model that provides bots that will trade 10 seconds before the auction is over.

What's clever about their business model is that they offer a free service of 15 snipes per month plus a monthly subscription model that provides preferential treatment over the free service for auction items.

So, one can understand the scenario of bot-wars emerging when imitators compete with the goal of going one better than Auction Sniper - and at this juncture one can then see the issue of proximity being a key factor in getting their bots to out-bid the competition's just-in-time before the auction closes.

How long before we see this behaviour meander through the loopholes of regulation and get used as an argument for 'best execution' - yikes!! 

 

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Ed Daniel

Ed Daniel

Senior Consultant, getting old you know ;-)

esdaniel.com

Member since

05 Jul 2007

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Europe

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This post is from a series of posts in the group:

Futuristic Banking

Stuff that's out there in the way out and beyond in banking.


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