>Python devs at HRT really know their stuff.
Its a finance firm - i.e scam firm. "We have a fancy trading algorithm that statistically is never going to outperform just buying VOO and holding it, but the thing is if you get lucky, it could".
Scammers are not tech people. And its pretty from their post.
> In Python, imports occur at runtime. For each imported name, the interpreter must find, load, and evaluate the contents of a corresponding module. This process gets dramatically slower for large modules, modules on distributed file systems, modules with slow side-effects (code that runs during evaluation), modules with many transitive imports, and C/C++ extension modules with many library dependencies.
As they should.
The idea that when you type something in the code and then the interpreter just doesn't execute it is how you end up with Java like services, where you have dependency injection chains that are so massive that when the first time everything has to get lazily injected the code takes a massive amount of time to run. Then you have to go figure out where is the initialization code that slows everything down, and start figuring out how to modify your code to make that load first, which leads to a mess.
If your python module takes a long time to load, this is a module problem. There is a reason why you can import submodules of modules directly, and overall the __init__.py in the module shouldn't import all the submodules by default. Structure your modules so they don't do massive initialization routines and problem solved.
Furthermore, because of pythons dynamic nature, you can do run time imports, including imports in functions. In use, whether you import something up at the top and it gets lazily loaded or you import something right when you have to use it has absolutely no difference other than code syntax, and the latter is actually better because you can see what is going on rather than the lazy loading being hidden away in the interpreter.
Or if you really care, you can implement lazy work process inside the modules, so when you import them and use them the first time it works exactly like lazy imports.
To basically spend time building a new interpreter with lazy loading just to be able to have all your import statements up at the top just screams that those devs prefer ideology over practicality.
> Its a finance firm - i.e scam firm. "We have a fancy trading algorithm that statistically is never going to outperform just buying VOO and holding it, but the thing is if you get lucky, it could".
HRT trades their own money so if it didn't beat VOO then they'd just buy VOO. There are no external investors to scam.
> "We have a fancy trading algorithm that statistically is never going to outperform just buying VOO and holding it, but the thing is if you get lucky, it could".
You wish lol. How do you think they pay for all the developers?
Firms like HRT don't even take outsider money, they don't really need to.
And besides, we don't get paid for beating stocks, a lot of funds will do worse than equities in a good year for the latter, the whole point is that you're benchmarked to the risk free rate because your skill is in making money while being overall market neutral. So you rarely take a drawdown anywhere near as badly as equities.
As a service this is often a portfolio diversification tool for large allocators rather than something they put all the money into.
It is true however that some firms are basically just rubbish beta vehicles that probably should in an ideal world shut down.
I don't know what you define as outsider money, but the fact is that they are a market maker, and you are never going to make large amounts of money on arbitrage by itself.
Two business models:
Good returns - take other peoples money, trade it, take 20% of profits
Excellent returns - trade your own money, make a bit less overall but keep 100% of profits
If the first case, whats the incentive for users to trade with you
In the second case, why start a company?
Not sure what you mean
Prop shops usually come about as the partners buy out other investors in a fund
> Its a finance firm - i.e scam firm. "We have a fancy trading algorithm that statistically is never going to outperform just buying VOO and holding it, but the thing is if you get lucky, it could". > Scammers are not tech people. And its pretty from their post.
It would be great if you included any sort of evidence or argument.
Reading on to the other comments, it looks like you're throwing out a lot of accusations and claims. I don't know what you think you know, but from the looks of it, you don't really know HRT's business. I don't really these days, but I knew it years ago, and it's not from taking client money or arbitrage or some weird scam. It's not magic but the world of algo trading isn't a ponzi scheme.
> "We have a fancy trading algorithm that statistically is never going to outperform just buying VOO and holding it, but the thing is if you get lucky, it could".
How they make $8B/y underperforming VOO?
Reference: https://www.businessinsider.com/hudson-river-trading-hrt-8-b...
Man from all these responses, so many people are unaware of the finance world, lol. Or just bots posting for HRT
In case you are unaware - very single trading firm makes money on fees, not by outperforming the market. This goes for firms like Vanguard too.
Just think about it for a little bit - if you could reliably outperform the market by any % with an algorithm why even start a company? Just take out loans, invest, make money, repeat and become rich. No expenses to manage a company.
You have no concept of the infrastructure and organization necessary to operate these enterprises.
All your posts here are low-information anti-finance rants.
> Because every single trading firm makes money on fees
I really want to know what you think this company does, precisely
I can't tell if people don't understand how financial firms work or are you just being sarcastic.
If a company has customers, and those customers buy a product, the company charges a price for that product.
They're a market market that provides liquidity to clients. They (as far as I know) don't charge fees, but earn their profits by exploiting the ask/bid spread.
A customer might want to offload TSLA and are willing to pay the market rate of $329. This trade might work in HRT's favor if they can sell it for $329.01. It's just 1 cent, but over millions of transactions these small amounts of profit add up.
The value captured by HRT is meaningful in the aggregate, but tiny and irrelevant to the institutional clients, and therefore can't be thought of as a fee. What HRT provides in return for taking clients' trades is liquidity.
> If a company has customers
They don't...
a) What do you call this at the bottom of the page https://www.hudsonrivertrading.com/liquidity/
b) If you don't have customers, why have a company?
I think you're misunderstanding what that page is: it's not an advertisement to invest with the company, it's an advertisement to trade via/with the company in the same way you might otherwise go manually trade from a Bloomberg terminal (or any other method).
There is no way to invest in the company, and the only way of becoming a "customer" is to engage in trading.
I don’t really understand question b), how else would you organize a venture involving more than a couple people?
I'm not sure how you intend performing the "take out loans" and "invest" stages without a company, once you have more than a few million dollars. Companies permit scaling past one person's worth of uptime and ability.
HRT is a prop firm, which means they don't have outside investors. They invest their own money like you said, no income from fees. You just proved that you have no idea what you are talking about.
No, they are a liquidity provider. Liquidity providers only make money when there are imbalances in the market. Notionally because markets tend to drive fast towards efficiency, you can't realistically make money just being a market maker.
So then, you have to offer additional services. HRT has the SDP that they provide, and of course charge fees for. But then the question is why would anyone do this, versus just going through any other financial institution.
The answer is basically all up on their website
"As a liquidity provider, HRT develops automated trading algorithms designed to provide the best prices to our clients".
The question that should be asked is as a user, why would I want to sign up with HRT or any similar financial company? The answer for HRT is because you want to have access to more complicated financial derivatives - you don't need to sign up and pay fees to buy basic stock.
So they promise that their algorithms give the user the best price, which is a legal way of saying that you will pay less for a certain asset and make money on it, and you can't say that because you can't guarantee this.
And its well known that nobody ever gets rich of an algorithm in finance unless you are well established large firm intricately tied with the government that can move so much money as to influence trading.
Being a market maker vs "We have a fancy trading algorithm that statistically is never going to outperform just buying VOO and holding it, but the thing is if you get lucky, it could" are two very different things lol
Moreover, I would be very surprised if the majority of their $8 billion annual profit came from client market making.
Right, exactly what I said. They don't make money by market making. They make money by charging transaction fees, and on an access basis to their "algorithms" which are designed against analyzing the complex futures that they are the market maker for.
The incentive for users to sign up with them is to get access to "better" pricing for whatever commodity they pair the buy/sell orders for - but remember these are futures so its all betting, and so the algorithms don't really mean anything.
They don’t charge fees, because they’re not a brokerage or exchange.
They pay fees to exchanges.
As a market maker, some rebates are given back conditional on their activity.
They have no users.
You’re just constantly obliviously asserting falsehoods that betray an almost comical lack of understanding of the reality of these businesses.
My understanding of these firms is limited too, but I’ve never heard of market makers charging transaction fees.
Isn’t it actually the opposite? they pay for order flow instead? They should be making money from bid-ask spread, not fees.
> Right, exactly what I said. They don't make money by market making
“client market making”. That’s very different from “market making”, you two are not in agreement at all here
Prop trading firms usually have returns higher than 25%, which is way higher than holding the S&P.
You're confusing prop shops and hedge funds.
Runtime imports are a maintenance nightmare and can quickly fragment a codebase. Static analysis of imports is so desirable that it is almost always worth the initialization performance hit. Tradeoffs.
Static analysis of imports should be solved by mypy (or your favorite static analyzer).
I guess you meant "run all imports at startup is desirable to check if they work", but I have a hard time agreeing with that (personally I think having a good test suite is needed, whereas running more code at startup is not wanted).
>Runtime imports are a maintenance nightmare and can quickly fragment a codebase
I agree, which is why you should design your modules correctly and import only the stuff you need.
I was pointing out that lazy imports vs runtime imports in functions are basically the same and lead to the same issues.
> I agree, which is why you should design your modules correctly and import only the stuff you need.
How do you achieve this without making gazillions of modules, where each module has just a few stuff?
Are you saying just use local import everywhere?
You can have one module with all the capability, but the capability is separated into submodules. And the __init__.py of the module doesn't auto import the submodules
So when you do this
It doesn't do anything functionality, and you may only have some small top level things available for you, like bigmodule.config, or bigmodule.logging.Then, you have your big initializer code in bigmodule.financedata. But the stuff you need for running scripts is in bigmodule.scripts.
So when you write
This code will take a while.But if you write
This will load fast.You don't need to have gazillion modules, just good organization. Also, in general, its a good practice to gate intensive compute/network operations behind an explicit function you need to call.
Also thank you for focusing the convo on the tech stuff instead of repeating finance bro myths
That sounds good in theory, but I haven’t come across a codebase that’s really optimized and free of unnecessary imports, especially in large companies.
And when you have to depend on external libraries beyond your control, how do you typically handle those situations?
As codebases get larger, inefficiencies are bound to happen. Having explicit imports that I can go look up and see where they are is better for resolving this, because you can trace how every module gets imported and time them. Having interpreter code that runs with lazy loading that is all hidden is not the way to solve this.
As for external libraries, you import them in places where you need to use them only to avoid the same pitfalls. Its also pretty easy to analyze the import process within those libraries, and then again import specific submodules only that limit what actually gets loaded.
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When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
Please don't post shallow dismissals...
https://news.ycombinator.com/newsguidelines.html
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