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WallStreetAnalytics / wallstreetanalytics

An endeavor to create an analytics tool to democratize the information hedge funds are creating teams to collect.
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Project Proposal #26

Open AmIAHotAsStoonk opened 3 years ago

AmIAHotAsStoonk commented 3 years ago

I want to preface this by saying it's just an idea and I have very little knowledge of how the current financial system works. I do know a thing or two about scale though. I know when there is only one node processing all of your messages that things get backed up. I know that if one user has direct access to a pipeline they can make high speed trades faster than anyone else and have a distinct advantage over other investors in that market. I know that if everything happens electronically there is no reason it should take 3 business days for money to show up in my account.

I think we have the momentum to really start something big here that could change the entire picture. For the stock market to be truly open and democratized then it should be a decentralized system where FTDs are a thing of the past and everyone is gated to the same transaction speed. A place where transparency is key and the number of shorts is shown right along with the rest of the data.

Objective-Resolve commented 3 years ago

While I agree that the issues you have highlighted are real - I don't think we'll be in a position to address underlying systematic problems in the stock market. We'll need to focus primarily on 1) how do we develop distributed analytic capability equivalent to a hedge fund or BB and make it available to retail; and 2) how do we deal with the hedge funds doing this as well - specifically retail investors won't have the time to dedicate that a paid team can to understanding social signals and their predictive power vis a vis their stock strategy - so how do we adjust for that to keep retail ahead of capital?

pdeneka commented 3 years ago

Clarification - we're not buying or selling stock, options, etc. through this project. We're aggregating data sources and providing data.

AmIAHotAsStoonk commented 3 years ago

While I agree that the issues you have highlighted are real - I don't think we'll be in a position to address underlying systematic problems in the stock market. We'll need to focus primarily on 1) how do we develop distributed analytic capability equivalent to a hedge fund or BB and make it available to retail; and 2) how do we deal with the hedge funds doing this as well - specifically retail investors won't have the time to dedicate that a paid team can to understanding social signals and their predictive power vis a vis their stock strategy - so how do we adjust for that to keep retail ahead of capital?

This is a project proposal we could run more than one project. If the goal is really about leveling the playing field we need to think long term and short term. What is currently proposed is really just a bandaid on a gaping wound that is our financial institution. The stock market will have to move to a decentralized system at some point just by the sheer volume.

Let's take a look at a plan that has the quickest time to enter the market. We could setup our own brokrage organization along with our own trading application. We could setup a system inside our org that uses a decentralized ledger. All stocks would be accounted for and there would be no FTDs on our end. We could potentially setup something based on ETH smart contracts. The problem would still come from other brokrages issuing FTDs when we buy assets from them but we could make that transparent and readily available to the SEC (in REAL TIME).

Yeah it would be hard and take a lot of time. It's risky and might not even get off the ground but we have momentum right now so we should go big.