All posts by Paul Raven

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Get up to speed on high-frequency trading

New York Stock Exchange buildingRemember that story we ran a few weeks back about the alleged theft of the Goldman-Sachs automated trading code?

Well, thanks to said case, Goldman-Sachs and the high-frequency automatic trading (HFT) practices that they dominate are increasingly sliding into the spotlight of Congressional scrutiny, so Ars Technica have knocked up a brief guide to what it’s all about. If you thought “the markets” were those guys in suits shouting at each other on the trading room floor, think again. [image by Coffee Maker]

If you look under the hood of the markets in 2009, you’ll find that the trading floor has been replaced by electronic networks; the frantic, hand-signaling traders have been replaced by computer systems; and all of moves in the trader’s dance—a thousand little tricks and techniques (some legal, some questionable, and some outright illegal) for taking regular advantage of speed, location, and information to generate profits—are executed hundreds of times per second, billions of times per day. And the whole enterprise is mainly powered by the same hardware from Intel, AMD, and NVIDIA, that Ars readers use for gaming.

[…]

Only about three percent of the trading volume on the NYSE is actually carried out by means of traditional “open outcry” trading, where flesh-and-blood humans gather to buy and sell securities. The other 97 percent of NYSE trades are executed via electronic communication networks (ECNs), which, over the past ten years, have rapidly replaced trading floors as the main global venue for buying and selling every asset, derivative, and contract. So the ECNs are the markets in 2009, and those pit traders who pose for the cameras are mainly there for the cameras.

In other words, Josephine Average Stock-Trader is going head to head with supercomputers every time she dips a toe into the game. The ECN algorithms specialise in making millions of tiny trades, each making fractions of pennies of profit – small beer when considered in isolation, but big profits when scaled up to the sheer volume of transactions that these systems can handle.

It’s like a vast virtual ecosystem of predatory code-critters; go find out more about it. Know thy enemy, and all that.

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Science and drugs and rock’n’roll: can we make science cool?

Much like science fiction, science isn’t considered to be cool (unless you’re a geek like us, of course). So what can be done about science’s image problem?

Over here in the UK, a chap called Richard Bowdler is trying to open the eyes of ordinary people to the cooler sides of science by doing a form of outreach. His Guerrilla Science organisation sets up tents at music festivals and hosts talks, lectures and participatory hijinks, with the aim of pressing people’s sensawunda buttons and banishing the notion of science as dull stuff for people with slide rules and labcoats.

Often the host asks how many of those present hail from a science background – and always, only few put their hands up. So does Bowdler hold with the widely held view that the British public are not interested in science?

“I don’t subscribe to that view, but I would say that science is seen in a very uncool light, which I personally believe to be a rather immature standpoint.”

Speaking on the evolution of music, science writer Zoe Cormier is at pains to press this point home. Explaining the reasons for setting up the project she says: “We’re here to show you science is NOT boring.” She could well be preaching to the choir. After every talk there are dozens of inquisitive minds throwing forth questions.

And as one speaker told me, these aren’t the same as the questions discussed in science labs. Instead, the audience tends to see the big picture, and often the scope of their enquiries takes the scientists by surprise. When there’s no more time for questions, small crowds descend upon the speaker as the Q&A continues by the candy-pink stretch limousine outside. All of those presenting their research are flattered by the interest, often returning to lectures on similar areas of research the next day to form impromptu roundtable sessions with the audience. There’s no end to people’s appetite for science here.

How much of that openness to new ideas is due to the, er, explorative frame of mind that prevails at music festivals is open to debate. But there’s plenty of evidence to suggest that science, when properly framed, can fascinate everyone – think of the popularity of Carl Sagan, for instance, or the inimitable lecture style of the late Richard Feynman.

But is there perhaps a risk of cheapening science by trying to make it more rock’n’roll? After all, for every exciting moment in the lab, there’s plenty of dull number-crunching and repetitive procedures to go through; hell, my first year of university eroded my interest in electronics almost completely. Should science be left to those most suited to it by temperament?

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Pluto has a posse

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Pluto and its moonsIf you’re among the body of people who decried the demotion of poor little Pluto, take heart – it (he?) may end up reinstated some time soon:

If Pluto is reinstated, it will probably be thanks to discovery rather than debate. Mark Sykes of the Planetary Science Institute in Tucson, Arizona, believes that revelations within and beyond our solar system over the coming years will make the IAU’s controversial definition of a planet untenable. “We are in the midst of a conceptual revolution,” he says. “We are shaking off the last vestiges of the mythological view of planets as special objects in the sky – and the idea that there has to be a small number of them because they’re special.”

Sykes believes that missions currently en route to Pluto and the asteroid Ceres, which orbits the sun between Mars and Jupiter, will reveal these dwarf planets as active and intricate worlds. Meanwhile, astronomers may find distant objects as large as Earth which the IAU would not define as planets.

Sykes is among those who prefer a simple and inclusive definition of planet status: if an object is big enough for its own gravity to squeeze it into a rounded shape, then call it a planet. That would make a planet of Pluto again, as well as Ceres and a growing number of other bodies.

All this debate around nomenclature just goes to point out that we’ve a lot still to learn about our own backyard – and that the pace of discovery is picking up. I’m hoping the public interest in space doesn’t fade out after the Moon landing anniversary; even if we can’t go to these places ourselves, I think it’s important for us to think and learn about the universe beyond our gravity well. [image courtesy NASA]

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Damless hydroelectricity?

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Otter Estuary, Devon, UKHydroelectric power generation usually relies on harnessing the potential energy of water moving down from springs in high places, but there’s an as-yet unexploited source of power available at the estuaries where rivers flow into the sea. [via SlashDot; image by me’nthedogs]

In the inverse of the desalination process, energy is released as pure water mixes with salt water… and we may be nearing a point where technology will allow us to exploit that reaction and tap a new sustainable source of electricity:

Extracting clean, fresh water from salty water requires energy. The reverse process – mixing fresh water and salty water – releases energy. Physicists began exploring the idea of extracting energy from mixing fresh and salty waters, a process known as salination, in the 1970s. They found that the energy released by the world’s freshwater rivers as they flowed into salty oceans was comparable to “each river in the world ending at its mouth in a waterfall 225 meters [739 feet] high,” according to a 1974 research paper in the journal Science. But those who have chased the salination dream have collided with technological barriers.

Brogioli has developed a new approach to salination, a prototype cell that relies on two chunks of activated carbon, a porous carbon commonly used for water and air filtration. Once he jump starts the cell with electric power, all that is required to produce electricity are sources of fresh and salty water and a pump to keep the water flowing. When the separate streams of salty and fresh water mix, energy is released.

A typical cell would require about three dollars worth of activated carbon, and, given a steady flow of water, the cell could produce enough electricity to meet the needs of a small house. It’s the equivalent, in hydroelectric power, of running your appliances from a personal 100 meter (338 feet) high waterfall.

Science being science, there are plenty of skeptics who don’t think it’ll work – or, more generously, who don’t think it will scale well. But it’s still worth looking into, as Brogioli points out:

Brogioli maintains that his salinity cell could be ramped up faster than other salination approaches and could be made as affordable as solar power in a decade or so. He argues that any new renewable energy source is worth looking into, even if it is only a partial solution to our energy and environmental problems.

“There is no really clean energy source, and none of them can replace fossil fuels alone,” he said. “So, it’s a matter of compromise: find the best resource for a given region and use many different resources together.”