Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol
&quot;So-called high frequency trading firms place trades in a fraction of a second, sometimes in a bet that they can move faster than bigger competitors.&quot;<p>First off: no.  Big money plays in high frequency trading (roughly half of all trading activity), and the smaller traders without instantaneous access are the losers in this game.<p>Secondly, NASDAQ&#x27;s obsession with precise global sequencing is A) misguided and B) effectively impossible to do right 100% of the time.  Given this, I would argue that the appropriate thing to do is change the market requirements.  And I&#x27;d argue that like this:<p>1) Temporally quantize the market.  Orders come in on an open temporal window that is sufficiently long to account for global latency of non-pathological communication (sorry, tor users) and a bit of computation time.  Everyone gets to swim in the same pool.  Maybe one second, maybe more.  Nobody gets to see the order book until it&#x27;s resolved.  Write-only.
2) Lock the book and fulfill orders from the set of satisfiable orders.  If there just contention for a trade (there will always be some), fulfill the contentious trades randomly using random zeedig generated from a pre-announced salt and a hash of some or all of the order book for the window.
3) Return the results and the hashes of the order book, next salt, etc, for verifiability and prep.
4) Re-open the order window.<p>High frequency traders would hate this, because they wouldn&#x27;t be able to pounce on quick movements, even without fronting slower traders.<p>It would, naturally, increase latency for trades by virtue of having to wait for market resolution.  However, mere sequencing doesn&#x27;t solve the problem of having to resolve and confirm trades (the speed of light is so cruel), so I&#x27;m left utterly unsold on the market-efficiency benefit of ultra-high order resolution.  Wealthy high frequency traders want to use time to buy an advantage, and the liquidity support they provide to the markets is dubious, at best, since they pull the plug as soon as things get crazy.<p>Quantize the markets.