Reply to post: You say "sophisticated algorithmic trading models"

Software dev cuffed for 'nicking proprietary financial trading code'

John Smith 19 Gold badge

You say "sophisticated algorithmic trading models"

I say automated man-in-the-middle attacks.

Actually the code is likely to be very complex because what hedge funds do is not simple (otherwise people would spot what was happening).

The myriad of different trades hedge funds make on basically every stock on the exchange (all of which seem to be able to be cancelled without executing and therefor having to pay any money) act as a test language on the state of the market moment by moment.

And by that I mean what they swoop in, buy enough of at a slightly better price then sell on to the actual customers.

So the algorithm is roughly

1) Generate trades

2) Build map of what's being bought

3) Buy what's being bought by offering a slightly higher price

4) Sell on to the actual buyer.

Obviously this only works "in the moment" hence the obscene amounts of money they will spend to put their servers as close as possible to the servers of the stock exchange they are using to rip real traders off from and their fondness for proper compiled languages running close to the metal with minimal cruft. Running a language parser that sophisticated (and keeping it running as they come up with new trades to probe the market) is indeed a skilled job.

It's interesting how quickly one of these giant-to-big-to-fail "institutions" goes down the pan when they actually have to honor their trades (as happened a few years back).

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