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Author Topic: [BTC-TC] Virtual Community Exchange [CLOSED]  (Read 315988 times)
burnside
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June 17, 2013, 10:39:27 AM
 #921

How come the time in the top page CST is diffirent to the CST here http://www.thetimenow.com/cst/central_standard_time

Maybe php recognizes DST?  That site you linked has a note on it:

Quote
Important note:
Most cities located in Central Standard Time (CST) zone currently observe Daylight Saving Time (DST).
Therefore, most cities there are using Central Daylight Time (CDT).
If it's wildly off, let me know, I'll spend more time on it.

Cheers.
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June 17, 2013, 11:04:58 AM
 #922

In "My Value Analysis" tab the "Total Paid" does not include the fee, which might be a bit misleading — especially considering that "My Trades" tab includes it instead.
Is this intentional?
If it is, at least some kind of small warning would be nice.


Definitely nothing intentional.  It should take it into account now.

Cheers.
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June 18, 2013, 01:29:41 PM
 #923

My withdrawal does not have a fee, so it takes time again to add it to the block.
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June 18, 2013, 04:04:22 PM
 #924

One thing I would like to see on BTCT is some sort of minimum granularity of prices. Right now, what happens all the time is that someone undercuts (or overbids) your ask or bid order by something silly like 0.01% or even less. So while you have functionally equivalent orders, the other one gets executed first since it's better by a negligible margin. Which means that with volumes being relatively low, you have to constantly babysit your order to ensure that it's at the right spot in the order book if there's one of those jokers going around constantly outbidding you by 1 uBTC.

In the low volume trades that occur on BTCT, these tiny fractions of a % have no meaning, but they serve to frustrate those trying to keep a competitive bid/ask in the books. A minimum granularity of in the price would help a great deal in overcoming this issue as it would force users that want to have the top order in the book to actually beat the current best price by a non-trivial (though still small) amount.
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June 18, 2013, 04:16:50 PM
 #925

One thing I would like to see on BTCT is some sort of minimum granularity of prices. Right now, what happens all the time is that someone undercuts (or overbids) your ask or bid order by something silly like 0.01% or even less. So while you have functionally equivalent orders, the other one gets executed first since it's better by a negligible margin. Which means that with volumes being relatively low, you have to constantly babysit your order to ensure that it's at the right spot in the order book if there's one of those jokers going around constantly outbidding you by 1 uBTC.

In the low volume trades that occur on BTCT, these tiny fractions of a % have no meaning, but they serve to frustrate those trying to keep a competitive bid/ask in the books. A minimum granularity of in the price would help a great deal in overcoming this issue as it would force users that want to have the top order in the book to actually beat the current best price by a non-trivial (though still small) amount.

Ban bots and part of the problem is solved.
PS! Bots do NOT help liquidity!

While reading what I wrote, use the most friendliest and relaxing voice in your head.
BTW, Things in BTC bubble universes are getting ugly....
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June 18, 2013, 04:18:06 PM
 #926

One thing I would like to see on BTCT is some sort of minimum granularity of prices. Right now, what happens all the time is that someone undercuts (or overbids) your ask or bid order by something silly like 0.01% or even less. So while you have functionally equivalent orders, the other one gets executed first since it's better by a negligible margin. Which means that with volumes being relatively low, you have to constantly babysit your order to ensure that it's at the right spot in the order book if there's one of those jokers going around constantly outbidding you by 1 uBTC.

In the low volume trades that occur on BTCT, these tiny fractions of a % have no meaning, but they serve to frustrate those trying to keep a competitive bid/ask in the books. A minimum granularity of in the price would help a great deal in overcoming this issue as it would force users that want to have the top order in the book to actually beat the current best price by a non-trivial (though still small) amount.

Ban bots and part of the problem is solved.
PS! Bots do NOT help liquidity!

Agreed!
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June 18, 2013, 04:34:54 PM
 #927

One thing I would like to see on BTCT is some sort of minimum granularity of prices. Right now, what happens all the time is that someone undercuts (or overbids) your ask or bid order by something silly like 0.01% or even less. So while you have functionally equivalent orders, the other one gets executed first since it's better by a negligible margin. Which means that with volumes being relatively low, you have to constantly babysit your order to ensure that it's at the right spot in the order book if there's one of those jokers going around constantly outbidding you by 1 uBTC.

In the low volume trades that occur on BTCT, these tiny fractions of a % have no meaning, but they serve to frustrate those trying to keep a competitive bid/ask in the books. A minimum granularity of in the price would help a great deal in overcoming this issue as it would force users that want to have the top order in the book to actually beat the current best price by a non-trivial (though still small) amount.

A lot of the time it's bots doing that.  There are a few bots that are just trading the spread with small volumes.

Annoying though it can be, I disagree with you.  If you want top bid or lowest ask then put a price that they won't outbid/undercut.  Alternatively you can force them to a price where you're happy to fill their order then move your own order.  Once you figure out their ranges it isn't hard to outmanouver them - for example on Bid side the most active bot won't outbid anything that's within 20% of the lowest Ask - so you can either bid at 19.9% below lowest ask or put a 1 unit ask yourself to reduce that range.  On very illiquid securities with large spreads you can even force the bots into selling to you then buying back at a higher price - and repeat until the owner notices.

Reason I disagree is simply that the process of outbidding - even at tiny increments - is a discovery process.  It's working out who won't go higher (or lower).  If you have a problem because of it, it means you aren't bidding/asking near the edge of your range.  If that's the case for both of you then reducing the minimum won't stop it happening - it'll just reduce the number of iterations before you get to the edge (the point where one of you won't change their order any more).  Either of you can already speed up that process - by using larger increments themselves.

0.1% may sound tiny - but that's half the trading fee.  i.e. it's half the cost that needs to be covered to make an arbitrage opportunity break-even or profitable.  If you were to raise the limit to 1% then you'd end up in a situation where someone could bid 1.1% below the arb point and, despite there being a 0.9% profitable range left noone else could outbid them without risking loss.

Because of that, if limits were to be imposed they'd need to be based on a percentage of SPREAD not PRICE.  So where the spread was small minimum overbids would be fine - where spread was large a more significant increment would be demanded.  But that makes it hard to understand.  And any such limit is a real pain on any active security - as if two or more people are trying to adjust prices at the same time, some of them may have orders rejected even though they met the criteria based on the information they had when they were entering their order.

In short I'd say No.  If another trader's actions are annoying then either:

1.  Live with it - the market IS (in part) for making profit from other traders.  On most trades someone is losing money (IPO sales aside) - a bit of butt-hurt is irrelevant compared to that.
2.  Do the same thing but better.
3.  Exploit it.
4.  Prevent it by being more aggressive in your own orders - force them to make hard decisions rather than just letting them keep outbidding in tiny increments.
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June 18, 2013, 06:28:35 PM
 #928

One thing I would like to see on BTCT is some sort of minimum granularity of prices. Right now, what happens all the time is that someone undercuts (or overbids) your ask or bid order by something silly like 0.01% or even less. So while you have functionally equivalent orders, the other one gets executed first since it's better by a negligible margin. Which means that with volumes being relatively low, you have to constantly babysit your order to ensure that it's at the right spot in the order book if there's one of those jokers going around constantly outbidding you by 1 uBTC.

In the low volume trades that occur on BTCT, these tiny fractions of a % have no meaning, but they serve to frustrate those trying to keep a competitive bid/ask in the books. A minimum granularity of in the price would help a great deal in overcoming this issue as it would force users that want to have the top order in the book to actually beat the current best price by a non-trivial (though still small) amount.

It's a spread bot. I noticed it, too. Maybe it's exploitable.

Say it's bid: 2.50, ask: 2.75. He will place his bets on 2.50001 (and 2.74999). When you place your order, the bot adjusts, so let's say you place a bid at 2.60, the bot will adjust and place his bid at 2.600001. Maybe one could move him that way on purpose. Increase your bet, wait till he adjusts, replace your bid etc. and if your finished, you sell without spread. Smiley

I try to just ignore it though, as he will adjust anyway.

Edit: I see, Deprived had the same idea.

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June 18, 2013, 06:32:25 PM
 #929

From a purely technical perspective, it would be impossible to ban the bots.  A crafty programmer can get around any sort of detection I could do.

One thing I would like to see on BTCT is some sort of minimum granularity of prices. Right now, what happens all the time is that someone undercuts (or overbids) your ask or bid order by something silly like 0.01% or even less. So while you have functionally equivalent orders, the other one gets executed first since it's better by a negligible margin. Which means that with volumes being relatively low, you have to constantly babysit your order to ensure that it's at the right spot in the order book if there's one of those jokers going around constantly outbidding you by 1 uBTC.

In the low volume trades that occur on BTCT, these tiny fractions of a % have no meaning, but they serve to frustrate those trying to keep a competitive bid/ask in the books. A minimum granularity of in the price would help a great deal in overcoming this issue as it would force users that want to have the top order in the book to actually beat the current best price by a non-trivial (though still small) amount.

There is already minimum granularity, or you'd be seeing 8 decimal places in the orders.  Wink  The problem is that the granularity doesn't scale.  I'd love to be able to setup per-issue scaling granularity eventually so that an issue like ASICMINER-PT that is ~2.8 BTC would have less allowable decimal places than say S.DICE-PT.  We'd display on the order interface the maximum decimals so everyone could see it.  It's low on the priority list though.  The backend decoupling of bitcoind and other minor bugs are sucking up all my dev time.

Cheers.
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June 18, 2013, 06:35:38 PM
 #930

It's a spread bot. I noticed it, too. Maybe it's exploitable.

Say it's bid: 2.50, ask: 2.75. He will place his bets on 2.50001 (and 2.74999). When you place your order, the bot adjusts, so let's say you place a bid at 2.60, the bot will adjust and place his bid at 2.600001. Maybe one could move him that way on purpose. Increase your bet, wait till he adjusts, replace your bid etc. and if your finished, you sell without spread. Smiley

I try to just ignore it though, as he will adjust anyway.

Edit: I see, Deprived had the same idea.

You CAN fill your own orders if you don't mind paying the 0.4%.  (0.2% on the buy and the sell)  So if you do the appropriate math to make sure it's still profitable, it should be fairly easy to manipulate the bots.
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June 18, 2013, 07:10:09 PM
 #931

One thing I would like to see on BTCT is some sort of minimum granularity of prices. Right now, what happens all the time is that someone undercuts (or overbids) your ask or bid order by something silly like 0.01% or even less. So while you have functionally equivalent orders, the other one gets executed first since it's better by a negligible margin. Which means that with volumes being relatively low, you have to constantly babysit your order to ensure that it's at the right spot in the order book if there's one of those jokers going around constantly outbidding you by 1 uBTC.

In the low volume trades that occur on BTCT, these tiny fractions of a % have no meaning, but they serve to frustrate those trying to keep a competitive bid/ask in the books. A minimum granularity of in the price would help a great deal in overcoming this issue as it would force users that want to have the top order in the book to actually beat the current best price by a non-trivial (though still small) amount.

A lot of the time it's bots doing that.  There are a few bots that are just trading the spread with small volumes.

Annoying though it can be, I disagree with you.  If you want top bid or lowest ask then put a price that they won't outbid/undercut.  Alternatively you can force them to a price where you're happy to fill their order then move your own order.  Once you figure out their ranges it isn't hard to outmanouver them - for example on Bid side the most active bot won't outbid anything that's within 20% of the lowest Ask - so you can either bid at 19.9% below lowest ask or put a 1 unit ask yourself to reduce that range.  On very illiquid securities with large spreads you can even force the bots into selling to you then buying back at a higher price - and repeat until the owner notices.

Reason I disagree is simply that the process of outbidding - even at tiny increments - is a discovery process.  It's working out who won't go higher (or lower).  If you have a problem because of it, it means you aren't bidding/asking near the edge of your range.  If that's the case for both of you then reducing the minimum won't stop it happening - it'll just reduce the number of iterations before you get to the edge (the point where one of you won't change their order any more).  Either of you can already speed up that process - by using larger increments themselves.

0.1% may sound tiny - but that's half the trading fee.  i.e. it's half the cost that needs to be covered to make an arbitrage opportunity break-even or profitable.  If you were to raise the limit to 1% then you'd end up in a situation where someone could bid 1.1% below the arb point and, despite there being a 0.9% profitable range left noone else could outbid them without risking loss.

Because of that, if limits were to be imposed they'd need to be based on a percentage of SPREAD not PRICE.  So where the spread was small minimum overbids would be fine - where spread was large a more significant increment would be demanded.  But that makes it hard to understand.  And any such limit is a real pain on any active security - as if two or more people are trying to adjust prices at the same time, some of them may have orders rejected even though they met the criteria based on the information they had when they were entering their order.

In short I'd say No.  If another trader's actions are annoying then either:

1.  Live with it - the market IS (in part) for making profit from other traders.  On most trades someone is losing money (IPO sales aside) - a bit of butt-hurt is irrelevant compared to that.
2.  Do the same thing but better.
3.  Exploit it.
4.  Prevent it by being more aggressive in your own orders - force them to make hard decisions rather than just letting them keep outbidding in tiny increments.

I don't have problems with people (or bots) outbidding me, my point was more that they really aren't outbidding me at all. The bid increments are so tiny that they're far below any reasonable margin that you would consider in your price/profit calculations.

As an example, I place a bid order for 0.0335 BTC per share, which is the top bid by a non-trival margin (say the best before was 0.033 or so). I then get outbid by a bid of 0.033501, which is 0.003% above my bid. For all intents and purposes, it is the same bid. With volumes being in the dozens at most typically, the extra cost incurred by the person placing the second bid are negligible (one-hundreth of a dollar-cent per share), yet it does ensure that the other bidder gains priority when the bid is filled. This scenario has happened several times today while trading DMS.SELLING, at slightly different values, but the order of magnitude is correct.

This kind of bidding behavior doesn't help with price discovery, it doesn't narrow the bid-ask spread and it doesn't provide the market with more liquidity. It's, in my eyes, exploiting a feature of the trading platform to get your order fulfilled before others with the same order and such an advantage is big in markets where trades happen infrequently.

On the other hand, making a bot does sound like fun. I might just dive into that in the future. If you can't beat em, join em Smiley
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June 18, 2013, 07:15:13 PM
 #932

One thing I would like to see on BTCT is some sort of minimum granularity of prices. Right now, what happens all the time is that someone undercuts (or overbids) your ask or bid order by something silly like 0.01% or even less. So while you have functionally equivalent orders, the other one gets executed first since it's better by a negligible margin. Which means that with volumes being relatively low, you have to constantly babysit your order to ensure that it's at the right spot in the order book if there's one of those jokers going around constantly outbidding you by 1 uBTC.

In the low volume trades that occur on BTCT, these tiny fractions of a % have no meaning, but they serve to frustrate those trying to keep a competitive bid/ask in the books. A minimum granularity of in the price would help a great deal in overcoming this issue as it would force users that want to have the top order in the book to actually beat the current best price by a non-trivial (though still small) amount.
I agree, though of course until this is fixed, I'll take advantage of that...

However I'm strongly against banning bots: it makes no sense to do that, it wouldn't help at all (as burnside already explained).

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June 18, 2013, 07:24:38 PM
 #933

I don't have problems with people (or bots) outbidding me, my point was more that they really aren't outbidding me at all. The bid increments are so tiny that they're far below any reasonable margin that you would consider in your price/profit calculations.

As an example, I place a bid order for 0.0335 BTC per share, which is the top bid by a non-trival margin (say the best before was 0.033 or so). I then get outbid by a bid of 0.033501, which is 0.003% above my bid. For all intents and purposes, it is the same bid. With volumes being in the dozens at most typically, the extra cost incurred by the person placing the second bid are negligible (one-hundreth of a dollar-cent per share), yet it does ensure that the other bidder gains priority when the bid is filled. This scenario has happened several times today while trading DMS.SELLING, at slightly different values, but the order of magnitude is correct.

This kind of bidding behavior doesn't help with price discovery, it doesn't narrow the bid-ask spread and it doesn't provide the market with more liquidity. It's, in my eyes, exploiting a feature of the trading platform to get your order fulfilled before others with the same order and such an advantage is big in markets where trades happen infrequently.

On the other hand, making a bot does sound like fun. I might just dive into that in the future. If you can't beat em, join em Smiley

Yeah, the scaling decimal limits per security would solve this.  For instance, imagine the following table:

highest biddecimals allowed
>10000
>1001
>102
>13
>0.14
>0.015
>0.0016
>0.00017
all else8

We'd clearly display in the interface the max decimals allowed on each individual security page.

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June 18, 2013, 07:30:58 PM
 #934

As an example, I place a bid order for 0.0335 BTC per share, which is the top bid by a non-trival margin (say the best before was 0.033 or so). I then get outbid by a bid of 0.033501, which is 0.003% above my bid. For all intents and purposes, it is the same bid. With volumes being in the dozens at most typically, the extra cost incurred by the person placing the second bid are negligible (one-hundreth of a dollar-cent per share), yet it does ensure that the other bidder gains priority when the bid is filled. This scenario has happened several times today while trading DMS.SELLING, at slightly different values, but the order of magnitude is correct.

This kind of bidding behavior doesn't help with price discovery, it doesn't narrow the bid-ask spread and it doesn't provide the market with more liquidity. It's, in my eyes, exploiting a feature of the trading platform to get your order fulfilled before others with the same order and such an advantage is big in markets where trades happen infrequently.

I disagree with some of this.  It DOES add liquidity because, even if we consider his bid to be the same as yours, by placing his bid he's increased liquidity at that price-point.  Problem with arbitrary limits is they add more serious problems - not the least of which is that valid orders can get rejected if someone else makes the same valid order at the same time.

Increasing minimum increment will either make a difference or it won't.

If it's too small to make a difference (i.e. they have to bid .03351 instead of .033501) then it's pointless.
But at the other extreme where it makes too big a difference (e.g. they have to bid .0345) then it distorts the market - as you can place a bid which allows profitable arbitrage and at the same time blocks others narrowing the margin.

On an aside it's a total waste of time anyway as it wouldn't stop anything.  I'd better explain why - as it isn't entirely obvious.

Any restriction on Bid increments could only be applied to the TOP bid - not to bids elsewhere in the book.

So you have you bid at .0335 and I want to bid .033501 but can't - as I have to bid more.

Fine my bot bids for 1 unit at .034, places my real order at .033501 (now legal as .0335 isn't top bid) then cancels my .034 order.  The system can't start cancelling existing bids if they would break the rules if new - or I could UNDERbid you by .000001 and force YOUR order to be cancelled.

Reducing the precision allowed on bids is what burnside tried - but that has its own problems.  Not the least of which is that if BTC rises anything with an underlieing USD element is going to need those extra digits.  Every time difficulty rises by a factor of 10 all mining bonds SHOULD have their value shifted 1 place to the right, needing 1 more digit.

The best hope for it to stop is actually for MORE bots to join - and let them keep outbidding one another until the spread closes to nothing.  Then just give them a nudge in the right direction with a temporary bid and let them trade with one another at a spread below the exchange's fees.

Also it's worth looking at what they respond to.  Some only respond to overbids worth more than X - and can be fooled into not adjusting price just by staggering your own bids in chunks just under X.  Also once you know X and know the size of their bid you can work out the potential cost of trying to force them into a bid you'd willingly fill.  All of which reminds me I really need to get my own GLBSE bot converted - though with BTC-TC's caching it won't be practical to strip cash from bots as efficiently as you could on GLBSE (a bot to raid other bots would need to read market data from uncached web-pages rather than cached API).
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June 18, 2013, 07:32:49 PM
 #935

I don't have problems with people (or bots) outbidding me, my point was more that they really aren't outbidding me at all. The bid increments are so tiny that they're far below any reasonable margin that you would consider in your price/profit calculations.

As an example, I place a bid order for 0.0335 BTC per share, which is the top bid by a non-trival margin (say the best before was 0.033 or so). I then get outbid by a bid of 0.033501, which is 0.003% above my bid. For all intents and purposes, it is the same bid. With volumes being in the dozens at most typically, the extra cost incurred by the person placing the second bid are negligible (one-hundreth of a dollar-cent per share), yet it does ensure that the other bidder gains priority when the bid is filled. This scenario has happened several times today while trading DMS.SELLING, at slightly different values, but the order of magnitude is correct.

This kind of bidding behavior doesn't help with price discovery, it doesn't narrow the bid-ask spread and it doesn't provide the market with more liquidity. It's, in my eyes, exploiting a feature of the trading platform to get your order fulfilled before others with the same order and such an advantage is big in markets where trades happen infrequently.

On the other hand, making a bot does sound like fun. I might just dive into that in the future. If you can't beat em, join em Smiley

Yeah, the scaling decimal limits per security would solve this.  For instance, imagine the following table:

highest biddecimals allowed
>10000
>1001
>102
>13
>0.14
>0.015
>0.0016
>0.00017
all else8

We'd clearly display in the interface the max decimals allowed on each individual security page.



Yes - that's about the only sane way of doing it.  I'm not convinced it's a real problem myself - but I'd actually benefit from it so certainly don't object (only bots and people in low-income countries can afford to sit there constantly updating orders).
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June 18, 2013, 07:36:00 PM
 #936

I just don't like bots, not saying it's 100% rational  Cool

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June 18, 2013, 09:28:06 PM
 #937

What about this one:
https://forum.litecoin.net/index.php/topic,551.msg29947.html#msg29947

Quote
I am sure you can improve liquidity if you do not allow tiny orders (worth less than X LTC) to set their own Bid or Ask price. Lets say this limit is set at 20 LTC

If the orderbook looks like:
Code:
Shares |  Bid    Ask  | Shares
10     | 1.2   | 1.3  | 20
20     | 1.1   | 1.4  | 40
30000  | 1.0   | 1.45 | 50


Now, if I had 5 shares of BLAH and like to sell those, I have 2 options:
Place my order at any available Ask, or sell at market (what ever is available on Bid side)

If I had <10 20 LTC and I like to buy shares of BLAH, I can only execute a market order (from Ask side) or add my Bid to any existing Bid available.

What happens if 17 shares is bought at 1.30? Nothing unusual - 3 shares will stay there and this will be the Ask as it's today.  (as those 10 at 1.2 on bid side)

Yes, this will probably not help to narrow the bid/ask spread but 1 share at 1.1 is no good to anyone anyways. Smiley

There is no need to invent a wheel. Only way you can narrow the spread is if you have several market makers for any stock or bond. Their job is to keep some type of spread and level of liquidity. (read up on "market maker" and or "specialist")

While reading what I wrote, use the most friendliest and relaxing voice in your head.
BTW, Things in BTC bubble universes are getting ugly....
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June 18, 2013, 10:00:11 PM
 #938

What about this one:
https://forum.litecoin.net/index.php/topic,551.msg29947.html#msg29947

Quote
I am sure you can improve liquidity if you do not allow tiny orders (worth less than X LTC) to set their own Bid or Ask price. Lets say this limit is set at 20 LTC

If the orderbook looks like:
Code:
Shares |  Bid    Ask  | Shares
10     | 1.2   | 1.3  | 20
20     | 1.1   | 1.4  | 40
30000  | 1.0   | 1.45 | 50


Now, if I had 5 shares of BLAH and like to sell those, I have 2 options:
Place my order at any available Ask, or sell at market (what ever is available on Bid side)

If I had <10 20 LTC and I like to buy shares of BLAH, I can only execute a market order (from Ask side) or add my Bid to any existing Bid available.

What happens if 17 shares is bought at 1.30? Nothing unusual - 3 shares will stay there and this will be the Ask as it's today.  (as those 10 at 1.2 on bid side)

Yes, this will probably not help to narrow the bid/ask spread but 1 share at 1.1 is no good to anyone anyways. Smiley

There is no need to invent a wheel. Only way you can narrow the spread is if you have several market makers for any stock or bond. Their job is to keep some type of spread and level of liquidity. (read up on "market maker" and or "specialist")

So if I want to put a small bid I just put a large fake one, put my small one on top then cancel the large one.

And if there's no bids at all you can't put one if it's small?

Really not seeing why so many people think they have some entitlement not to be over-bid.  Making it harder for higher bids to be placed isn't helping anyone or adding liquidity.

You've given a solution - but not explained what problem it is solving or how it solves it.

EDIT: Let me explain one of the problems with this solution (assuming it actually solves something).  A not uncommon scenario is a share with an enormous spread between bid and ask - usually after someone panic sold.  With this solution noone could put up a small bid at anywhere near a reasonable price - they'd either have to pile on the 10,0000 units at .00001 bid or buy from the ask.  With a tight spread it would do no harm (and no good) - with a wide spread it's positively terrible.  The only person who benefits is whoever has the top bid - who now can't be outbid by small traders no matter how ridiculously low their bid is.  For everyone else the bid is either neutral or bad.
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June 18, 2013, 10:09:03 PM
 #939

As an example, I place a bid order for 0.0335 BTC per share, which is the top bid by a non-trival margin (say the best before was 0.033 or so). I then get outbid by a bid of 0.033501, which is 0.003% above my bid. For all intents and purposes, it is the same bid. With volumes being in the dozens at most typically, the extra cost incurred by the person placing the second bid are negligible (one-hundreth of a dollar-cent per share), yet it does ensure that the other bidder gains priority when the bid is filled. This scenario has happened several times today while trading DMS.SELLING, at slightly different values, but the order of magnitude is correct.

This kind of bidding behavior doesn't help with price discovery, it doesn't narrow the bid-ask spread and it doesn't provide the market with more liquidity. It's, in my eyes, exploiting a feature of the trading platform to get your order fulfilled before others with the same order and such an advantage is big in markets where trades happen infrequently.

I disagree with some of this.  It DOES add liquidity because, even if we consider his bid to be the same as yours, by placing his bid he's increased liquidity at that price-point.  Problem with arbitrary limits is they add more serious problems - not the least of which is that valid orders can get rejected if someone else makes the same valid order at the same time.

Well, with an increased minimum increment the other bidder either has to place the same bid that I placed, and therefore not have priority on order execution (at least, that's how I assume it work. Burnside, can you confirm that if 2 orders are placed at the same price, the oldest is executed first if a market order comes in?) or at an increased price that actually has a non-trivial markup over my bid.

Quote
If it's too small to make a difference (i.e. they have to bid .03351 instead of .033501) then it's pointless.
But at the other extreme where it makes too big a difference (e.g. they have to bid .0345) then it distorts the market - as you can place a bid which allows profitable arbitrage and at the same time blocks others narrowing the margin.
I agree that the we should err on the side of caution when increasing the increment. It should not be so large that the market is distorted. Currently, there is 0.2% fee on each trade, so I would say that the minimum increment should be somewhere between 0.05% and 0.1% or so. But there is at least a lot of improvement to be had from the current situation where you can have 0.003% increments (or less).

The number-of-decimals solution that Burnside proposed looks to be the most effective way to address the issue. It also avoid the problem that you rightfully pointed out (and that I didn't quote) of bid increments only applying to the top bid (or bottom ask) and that bots can circumvent it by placing a dummy top bid and taking it down directly after.

I don't like the solution that was posted above, where a minimum total bid value (measured in BTC or LTC) is required to overbid the top bid. Small players should be able to set their price just like big players (and it still doesn't limit well-designed bots). Overbidding is an essential part of the market, but we should make sure that people (or bots) are actually overbidding and not just abusing the system to get priority on execution by placing what comes down to effectively the same order with a little trickery.
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June 18, 2013, 10:19:02 PM
 #940

As an example, I place a bid order for 0.0335 BTC per share, which is the top bid by a non-trival margin (say the best before was 0.033 or so). I then get outbid by a bid of 0.033501, which is 0.003% above my bid. For all intents and purposes, it is the same bid. With volumes being in the dozens at most typically, the extra cost incurred by the person placing the second bid are negligible (one-hundreth of a dollar-cent per share), yet it does ensure that the other bidder gains priority when the bid is filled. This scenario has happened several times today while trading DMS.SELLING, at slightly different values, but the order of magnitude is correct.

This kind of bidding behavior doesn't help with price discovery, it doesn't narrow the bid-ask spread and it doesn't provide the market with more liquidity. It's, in my eyes, exploiting a feature of the trading platform to get your order fulfilled before others with the same order and such an advantage is big in markets where trades happen infrequently.

I disagree with some of this.  It DOES add liquidity because, even if we consider his bid to be the same as yours, by placing his bid he's increased liquidity at that price-point.  Problem with arbitrary limits is they add more serious problems - not the least of which is that valid orders can get rejected if someone else makes the same valid order at the same time.

Well, with an increased minimum increment the other bidder either has to place the same bid that I placed, and therefore not have priority on order execution (at least, that's how I assume it work. Burnside, can you confirm that if 2 orders are placed at the same price, the oldest is executed first if a market order comes in?) or at an increased price that actually has a non-trivial markup over my bid.

Quote
If it's too small to make a difference (i.e. they have to bid .03351 instead of .033501) then it's pointless.
But at the other extreme where it makes too big a difference (e.g. they have to bid .0345) then it distorts the market - as you can place a bid which allows profitable arbitrage and at the same time blocks others narrowing the margin.
I agree that the we should err on the side of caution when increasing the increment. It should not be so large that the market is distorted. Currently, there is 0.2% fee on each trade, so I would say that the minimum increment should be somewhere between 0.05% and 0.1% or so. But there is at least a lot of improvement to be had from the current situation where you can have 0.003% increments (or less).

The number-of-decimals solution that Burnside proposed looks to be the most effective way to address the issue. It also avoid the problem that you rightfully pointed out (and that I didn't quote) of bid increments only applying to the top bid (or bottom ask) and that bots can circumvent it by placing a dummy top bid and taking it down directly after.

I don't like the solution that was posted above, where a minimum total bid value (measured in BTC or LTC) is required to overbid the top bid. Small players should be able to set their price just like big players (and it still doesn't limit well-designed bots). Overbidding is an essential part of the market, but we should make sure that people (or bots) are actually overbidding and not just abusing the system to get priority on execution by placing what comes down to effectively the same order with a little trickery.

With multiple orders on exact same price the oldest DOES get filled first.

I'm fine with limiting decimals based on price - that doesn't have any obvious flaws (provided it allows reasonable definition).  I'm still not seeing what the big problem is - other than people being offended that they weren't outbid by much.  The only time you have the right to top bid is if you place a bid that noone else is willing to beat.  That's rarely the case - usually if you get top bid it's because noone else was around or paying attention, not because they wouldn't go higher.  I don't see the change actually achieving much other than maybe narrowing spreads slightly faster (which is good) - bots (and low-income people who can sit there refreshing) will still outbid you all the time you're below their maximum bid price.  Just by slightly more.
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