Lewis is not the first to cry foul on these strategies

A small group of financial firms are using their technological superiority to skim the top off the market, Michael Lewis claims in his new book "Flash Boys." There's an increasingly heated debate over whether the practices, known as high-frequency trading, are harmful or helpful. Lewis, for his part, says the market is "rigged," and several federal agencies, including the Department of Justice, are now looking into what Charles Schwab recently labeled "a growing cancer."
Sophisticated and expensive puters allow high-frequency traders to take advantage of minuscule differences in price among the many exchanges where securities are bought and sold. Some firms pay to place their puters on the site of a stock exchange to be sure their access to price data is as fast as possible,Toyota Lexus Smart Key Programmer for 2009~2012 Smart Key a practice known as colocation; others will use technology to obscure their trading intentions for a few crucial thousandths of a second. Lewis's book tells the story of Brad Katsuyama, a former trader at the Royal Bank of Canada in New York. Katsuyama opened a new stock exchange last year to give investors protection from HFT.

Lewis is not the first to cry foul on these strategies. Eric Scott Hunsader, the founder of Nanex, has made himself immensely unpopular in some circles for his outspoken and persistent criticism of HFT, which he first encountered during the "flash crash" of 2010. Bloomberg called him the "nemesis" and "scourge" of the HFT world.I asked Hunsader to talk about the book, the new stock exchange, and his long career in financial technology. The conversation focused on the Securities and Exchange Commission ruling in 2007 that allowed what we now know as high-frequency trading. The transcript, edited for length and clarity, is below.Wonkblog: When I was a kid,MB Dump Key Generator from EIS Super SKC Calculator I can remember my grandpa showing me how to look up stock prices in the newspaper. And there were exactly three exchanges. Oftentimes the prices were in fractions one-eighth, three-quarters, and so on. And then, it wasn't long after that that I was showing him how to look up stock prices online. I'm wondering if you can talk about the transition into electronic trading -- and you think that at least initially, it was good for everybody. Is that right?Eric Hunsader: Oh yes. Definitely, just like puterization improved the efficiencies of all industries, the same thing happened in the beginning.

It doesn't even have to be the same stock

All the other algorithms out there are based on reading what the orders ing into and out of the book are. When they suddenly see prices moving, and they know that they're not the fastest, but they're faster than the general public, they know that if they jump on the trend right away, they will be able to dump it off on the other slower movers who will start reacting a few seconds later -- or a second later, or a hundred milliseconds later. So it's very easy to influence a lot of other algos to join you. If you have enough money, you can cause what are known as momentum ignition events, where you create enough price movement in the right direction and in the right way to get the other algos to believe, 'Hey, something's going on. I want to participate."

They all jump in.All of a sudden, what happens and we see this in the market every day it will take the price up 5 percent in a second, on hundreds of trades. The machines are just feeding off themselves. They all have their different limits, so the fire kind of puts itself out, and then when no real news about the stock materializes, it's a race back down to the bottom. We get these 5-percent moves inside of a second in these big-cap stocks.A lot of the criticism of Lewis's book seems to be that it is already out of date, that the practices it describes were very mon a few years ago but are less so now.

That's not true. I certainly don't see a change. This all es to how Brad Katsuyama created this program called Thor, and then decided to create the exchange IEX. Thor was designed to time the trades so they would hit, say, BATS, the NYSE and NASDAQ all at the same time, so that a high-frequency trader at each one of those facilities couldn't see it fast enough to react and get to the other exchange. And so that's what Thor did. But Thor only works when the networks are clear and uncongested. if one of the networks, on one of the exchanges, has to process another, even 50 quotes -- that's just enough time, enough delay, that it will expose what Thor is trying to do. It doesn't always work, but it works often enough. It doesn't cost anything to stuff these quotes in the system.
That's why we see these high quote rates in stocks without trading. It doesn't even have to be the same stock.

Brillig Understanding CEO Bruce Wilcox Brillig Understanding

Bruce Wilcox: It's not hardly true. Angela has millions of people chatting with her every day. They couldn't hire enough pedophiles to do that chatting. She's strictly a conversation agent, residing locally on the phone.Why do you think that hoax had legs? What is it about an AI chatbot that would lead some people to believe such a thing could be true?Wilcox: Angela asks questions like what is your name to address you and what is your age to keep children away from certain topics. Parents get nervous these days whenever any question is asked of their kids.So that's why you think some people were willing to believe that there was a dark motive behind Angela?

Wilcox: The more realistic an AI is, the more people will see their own fears and fantasies in what it says. Parents are hypersensitive these days.AUTOCOM CDP Plus for Cars & Trucks & Generic 3 in 1
But there were obvious lies being said, so it was more than mere hypersensitivity. They made claims of things Angela said that we know she couldn't have said.Such as? And why wouldn't she have been able to say them?
Wilcox: Angela asks about your family, but she doesn't memorize that you have a brother, so she wouldn't inquire about your brother later. And some things that have been attributed to her saying about tongues in the sexual sense, she does not have in her repertoire.What makes our technology so convincing is that, unlike most chatbots out there, which can make single quibbling responses to inputs, ours can lead conversations and find appropriate prescripting things to say much of the time.

We care about backstory and personality and emotion, and strive to create true characters with a life of their own whose aim is to draw the user into their world.AUTOCOM CDP Pro 3 in 1 for Cars & Trucks & OBD2 2012.02 With Bluetooth
The characters are convincing because they are convinced of their own reality...Angela successfully captures the teen personality. For Angela it is all about her feelings. And Angela is selfish at times. And not only can she be rude but she can detect you being rude and react appropriately. This user is deeply involved in emotional reactions to Angela. That's what we strive for.We won the 2010 Loebner Prize by fooling a human judge into thinking our chatbot was a human. It was a plished in part via our attention to creating synthetic emotion.What are the biggest challenges in creating the AI behind this project?

This munity of women innovators

SCOTT: I think for one, young people are very lucky to have the resources now that maybe they don't - they would've had before. Currently only 1 out of 10 schools teaches puter programming. So luckily code.org has created a great new initiative called Hour of Code which will allow people, for free, you can try out programming on your own. So even just that exposure to programming would allow more women to get involved with technology and try it out and participate in this ever-growing field. And I think girls in general should just put their fear aside when they go to their classes. It's important to participate. It's important to be heard and not let the stereotypes stop you.

And Lyndsey Scott is tweeting a day in her life today as part of our Women in Tech series. You can follow along and jump in as you like at #NPRWIT. Now you know, that hashtag has more than 7,000 tweets now. This munity of women innovators and entrepreneurs is growing every day, and the conversation is interesting. Amanda Spann of IBM recently tweeted her day. She wrote I was afraid for the longest that because I didn't code, I couldn't work in tech. I reached out to friends in the industry. I sought out advice, feedback, insights, et cetera until I ran into opportunity. In the next few days, we will hear from Stephanie Hill, a vice president of Lockheed Martin. Ingrid Vanderveldt, co-founder of the Billionaire Girls Club. That's a group that mentors girls to foster entrepreneurship.

And Rajini Ajiri ph, she works in West Africa developing apps to help people with disabilities, and she's teaching girls there how to code. We hope you will follow these women and contribute your own stories and questions. SCOTT: In school I didn't realize that there was such a gap, such a gender gap, such a racial gap in puter programming because my classes were fairly diverse. Hack requires Facebook's HHVM Hip Hop Virtual Machine to run. HHVM is a virtual machine that piles PHP, normally an interpreted language, into byte code, so it can run more quickly.Hack is basically an extension of the PHP language with built in static typing, a feature found in more traditional programming languages such as C/C++ and Java, Sullivan said.

Many of the newer Web-oriented programming languages

Many of the newer Web-oriented programming languages, such as PHP and JavaScript, do not have static typing, hence they are referred to as dynamically typed languages.With dynamic typing, "there is no explicit information in the source code that describes what kind of information the program is dealing with," O'Sullivan said.In contrast, static typing requires the programmer to define the data type for each variable before that program is piled or run.Though it takes extra work to implement, static typing prevents run-time errors occurring when the wrong data type is entered into the program, either by human input or some other puter function.

"There are certain kinds of errors and crashes that can occur," if the programmer is not careful about what data is assigned to variables, O'Sullivan said.Renault CAN Clip Diagnostic Interface
"These latent errors can hide for a long time in a dynamically typed languages."
The HHVM virtual machine has a built-in type checker to ensure that all of the typed information is correct. Hack even allows the programmer to define unique data types."Syntactically, Hack is very close to PHP. We allowed it to be possible to run PHP and Hack code side-by-side so you can gradually convert your language codebase from PHP to Hack," O'Sullivan said.

Certain deprecated PHP features, however,Volvo Diagnosis Interface
are not supported in Hack, and neither are a handful of features that don't work well with static typing.Hack also es with a number of additions not found in PHP. One is Collections, a way to create arrays with more nuance than the array function offered by PHP itself, O'Sullivan said.Hack also eases the use of closures through the use of Lambda expressions. Closures, which were added to Java 8, "make it easy to succinctly write fairly plicated data transformations," O'Sullivan said.
Hack's Lambda expressions provide a way to create closures "with a fewer number of keystrokes, which is a big win for productivity," he said.Facebook has supplied a number of text editor plug-ins on the Hack website to help coders write in the language, though the pany is hoping volunteers will build a few more elaborate ones.O'Sullivan didn't reveal any specific plans to offer the Hack augmentations back to the keepers of PHP, though he did note that the pany plans to "work closely with the open-source munity," to further develop the language.