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Author Topic: [CANCELLED] High Frequency Trading Algorithm ETF IPO  (Read 5921 times)
stslimited
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April 22, 2013, 11:40:30 AM
 #21

That is arbitrage, not high frequency trading.

The algorithm has several subroutines.

It actually does HFT at bid and ask judging latency and distance to exchanges where possible, as well as pair trades between correlated assets, amongst others things.

Although this algorithm can seek to engage in several orders within milliseconds, the exact interval or definition of HFT is ambiguous, as it is inaccessible to most people. Therefore people will be interested in any profitable trading algorithm.

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stslimited
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April 22, 2013, 11:45:24 AM
 #22

Where is STS Ltd registered?

I'd like to know this too before considering investing. Plus proof that you are legitimate and own STS Ltd.

This has been posted now but what would you like to see?

Funds do not traditionally need much of a web presence, especially not proprietary algorithms. And are there any traditions in bitcoin funds that have materialized over the last 8 months? is bitcoin-otc the best the community has, because that place is completely irrelevant to STS ltd operations.

I think I will post the letter from the Secretary of State where it is registered, but maybe this community has other things in mind.
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April 22, 2013, 11:58:44 AM
 #23

The hazing is more a forum thing.  We expect forum discussion (Q&A) as part of the approval process.  We realize not everyone can be a pro, so we lean heavily on the pros in the forums asking the hard questions.  This thread is a good example.  It's not always pleasant, but if your business plan is a good one it'll stand up just fine.

Its a bit time consuming and tedious actually as none of the critics have even asked about the business plan or commented about the ample disclosures I posted.

Zero other traded companies in this forum have listed these things that I think make a public company more legitimate, although mine does and these are things that publicly traded American companies disclose.

My impression, at this point, is that this community does not know how to vet anything except mining companies, and a couple of gambling websites. Just from taking a cursory look at other threads on the securities subforum, and taking a cursory look at the companies that have been approved for listing on the exchanges. I'll be available to address further criticism for a limited time to further understand this community, but this process has already put a bad taste in my mouth and I think there should be a real discussion on how to attract commerce and wealth generation in bitcoin and cryptocurrencies.
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April 22, 2013, 12:27:46 PM
 #24

As someone who's interested in diversifying my Bitcoin holdings away from mining companies, I am very interested.

However I am also skeptical.

A google search for  "state trading society ltd" has this thread as its first result, and the rest of the first page is irrelevant.   Putting quotes around the "state trading society" bit confirms that a company of that name actually exists, but nothing more.

So, if you are an entity that has been created purely to list on btct.co and trade bitcoin, whose IP (algos) are you using, and where is the "proof" that these algos are real and work (and that you have the rights to use them)?  And if STS Ltd  is an entity that actually trades BATS, EDGE etc, then where is the "proof"?

On a totally different note, quarterly dividends is a lifetime in Bitcoin land (it's a cliche, I know, but it's true).

You mention your plan to
Quote
The fund will seek to hedge bitcoin volatility in relation to the USD holdings with forward delivery.

I hope by that what you really mean is that you intend to hedge USD volatility.   This is a bitcoin-based investment in a bitcoin-based trading fund - all profits should be measured in bitcoin.  (that's probably what you meant, however the sentence to me could be read either way).

Given the significant price differentials between the exchanges (I've seen $10 differences between btc-e and mtgox at times), I am hoping that cross-exchange arbitrage is one of your plans.

I have high hopes - if you get this right, the possibilities are huge.

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kakobrekla
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April 22, 2013, 12:28:11 PM
 #25

This guy is a nobody and doesn't want to learn apparently. Move along.

stslimited
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April 22, 2013, 12:36:10 PM
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As someone who's interested in diversifying my Bitcoin holdings away from mining companies, I am very interested.

However I am also skeptical.

A google search for  "state trading society ltd" has this thread as its first result, and the rest of the first page is irrelevant.   Putting quotes around the "state trading society" bit confirms that a company of that name actually exists, but nothing more.

So, if you are an entity that has been created purely to list on btct.co and trade bitcoin, whose IP (algos) are you using, and where is the "proof" that these algos are real and work (and that you have the rights to use them)?  And if STS Ltd  is an entity that actually trades BATS, EDGE etc, then where is the "proof"?

On a totally different note, quarterly dividends is a lifetime in Bitcoin land (it's a cliche, I know, but it's true).

You mention your plan to
Quote
The fund will seek to hedge bitcoin volatility in relation to the USD holdings with forward delivery.

I hope by that what you really mean is that you intend to hedge USD volatility.   This is a bitcoin-based investment in a bitcoin-based trading fund - all profits should be measured in bitcoin.  (that's probably what you meant, however the sentence to me could be read either way).

Given the significant price differentials between the exchanges (I've seen $10 differences between btc-e and mtgox at times), I am hoping that cross-exchange arbitrage is one of your plans.

I have high hopes - if you get this right, the possibilities are huge.

Its SEO ambiguous, as google isn't a need or a consideration nor does it contain the target audience in a company like this.

The algorithms are property of STS Ltd, and that is pretty much the entire extent the company has in this endeavor. The algorithms exist and they function, so how does investigating secretary of state filings help anyone? I mentioned the company name solely so you guys could google it but the direction of the investigation seems to have turned into a complete red herring for everyone now.

The share distribution is a solely related to the listing of and the profits of the HFT algorithm. As far as company hierarchy is concerned, this will be a division that can be spunoff.

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April 22, 2013, 12:38:12 PM
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I would be surprised if STS Ltd had more than one employee.
stslimited
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April 22, 2013, 12:39:31 PM
 #28

I would be surprised if STS Ltd had more than one employee.

Also a red herring, BTCT.CO 's dividend distribution for every company listed is run by one person.
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April 22, 2013, 12:41:48 PM
 #29

This guy is a nobody and doesn't want to learn apparently. Move along.

I want to list a company, diversify bitcoin listings away from mining, thanks for the "education". You literally put me on ignore within 2 minutes of joining your channel. You are a bigger danger to bitcoin commerce than any of the potential companies you blacklist and discredit within 120 seconds.

If you want to be a defacto regulatory, at least come up with sensible regulations.
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April 22, 2013, 12:46:27 PM
 #30

So rather than denying it, you essentially confirm that you're a one man show. Trading algorithm born out of a basement? Roll Eyes

How do you expect to get through the btct.co moderation process? (You won't)
stslimited
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April 22, 2013, 12:56:07 PM
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So rather than denying it, you essentially confirm that you're a one man show. Trading algorithm born out of a basement? Roll Eyes

How do you expect to get through the btct.co moderation process? (You won't)

I've looked at other listed bitcoin share companies and I just don't think that question is relevant. You made up that question on the spot as well as the arbitrary amount of legitimacy it earns. We could do this all day and it won't get anyone anywhere.

How about this, read the prospectus of any ETF trading in NYSE or NASDAQ and tell me in clear numbers how many people are managing that ETF. Then tell me what you would like to see in this one.

Secondly, look at a couple public algorithms on Tradestation and tell me how many developers worked on them, and if that is at all correlated to their performance.
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April 22, 2013, 02:06:43 PM
 #32

OK. I'm interested.
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April 22, 2013, 02:54:04 PM
 #33

A good place to start would be proving that the company exists and has been trading profitably.

Historical financial statements in the format you'd be reporting future ones in would also be useful.

There's no point discussing the detail of your operation until you've proven there actually IS an operation.

Quoting as still largely not addressed.

SAYING it's been profitable isn't the same thing as proving it.  Even then you only claimed to have increased BTC by 20% in 4 weeks during a period where BTC fell heavily.

Maybe sort out some demonstration of it actually trading?  Seeing it trade (over Teamviewer or similar) wouldn't give away any details of your algorithms but would at least prove you actually had software that did automatic trading.

How are you going to present financial reports?

To what extent is your capital actually kept BTC denominated?  If you're trading nasdaq etc then that means using USD there.  If only a minority of your holdings are on BTC-E and only part of them are in BTC then it oculd well be that the vast majority of your holdings are actually NOT in BTC - in which case your NAV is going to change more as a result of the BTC/USD exchange-rate moving than from any results of your own trading.  That's why historical results would be good - as they'd allow us to assess the actual effective denomination of what you're offering (that it's sold priced in BTC means nothing of itself if the funds will then largely be converted into USD).

How do you move USD in and out of BTC-E btw?  That's the biggest issue with trying to arbitrage their price vs that on Gox - it's easy to move the BTC in one direction but getting USD in the other is time-consuming/tricky/expensive.
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April 22, 2013, 04:34:17 PM
 #34

A good place to start would be proving that the company exists and has been trading profitably.

Historical financial statements in the format you'd be reporting future ones in would also be useful.

There's no point discussing the detail of your operation until you've proven there actually IS an operation.

Quoting as still largely not addressed.

SAYING it's been profitable isn't the same thing as proving it.  Even then you only claimed to have increased BTC by 20% in 4 weeks during a period where BTC fell heavily.

Maybe sort out some demonstration of it actually trading?  Seeing it trade (over Teamviewer or similar) wouldn't give away any details of your algorithms but would at least prove you actually had software that did automatic trading.

How are you going to present financial reports?

To what extent is your capital actually kept BTC denominated?  If you're trading nasdaq etc then that means using USD there.  If only a minority of your holdings are on BTC-E and only part of them are in BTC then it oculd well be that the vast majority of your holdings are actually NOT in BTC - in which case your NAV is going to change more as a result of the BTC/USD exchange-rate moving than from any results of your own trading.  That's why historical results would be good - as they'd allow us to assess the actual effective denomination of what you're offering (that it's sold priced in BTC means nothing of itself if the funds will then largely be converted into USD).

How do you move USD in and out of BTC-E btw?  That's the biggest issue with trying to arbitrage their price vs that on Gox - it's easy to move the BTC in one direction but getting USD in the other is time-consuming/tricky/expensive.

This algorithm is not doing arbitrage between bitcoin exchanges. It trades the order book, and also engages in pair trades between correlated assets.

The amount of assets kept in USD depends on how large the fund gets. The majority of the portfolio will be in bitcoin because the trading algorithm does not require all capital to be deployed. (an individual trade may use 10% of capital, for instance) BTC-E cannot handle many large orders as there is not liquidity there to support it right now.

I have been thinking about how to post previous performance just to get the fund rolling. I also talked to someone on bitcoin-assets about this sort of thing too.

stslimited
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April 22, 2013, 05:07:12 PM
 #35

OK. I'm interested.

glad to see this, keep following the thread
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April 22, 2013, 05:29:28 PM
 #36

This is an IPO of an exchange traded fund (ETF). The underlying asset is the profit of a high frequency trading (HFT) algorithm created by State Trading Society (STS Ltd.)

STS Ltd. engages in algorithmic trading and derivatives research. The company’s trading algorithms currently run on electronic exchanges such as Nasdaq, BATS, EDGE, NYSE, and BTC-E.

Few questions on the company:
1) Who's the registered agent under STS Ltd?
2) What platform does the company currently use to execute HFT on the Nasdaq and NYSE exchanges?
3) Does the company currently have real-world investors that profit from the HFT?


Share capital is used directly for the trading algorithm. This is a computerized operation whose funding (for this ETF) will be from the ground up, much like how the mining companies operate. STS Ltd. will cover the IPO listing fees.

Specifications:
Exchange for listing: BTCT.CO BTC Trading Corp.
Shares: 100,000
Price: .20 bitcoins, but tbd by free market
Dividends: Quarterly or special dividends, TBD

Anybody that has ever lost money trading should understand the implications of this fund and why it would be good for them.

Transferring ownership of shares can continue even if the exchange goes down.

If there are any questions, skepticism or concerns, please PM me. This thread will be used to judge sentiment and post NAV.

Here's what I've gathered so far by reading this thread:
1) User creates an account on April 21st, 2013 and rapidly gets out of Newbie jail with the sole intent of getting into Securities
2) User creates a Securities listing asking for BTC20,000 (100,000 available shares) for their HFT "expertise".
3) Instead of pleading their case with evidence, User badmouths anyone who shows skepticism.

Here are my fund-related questions:
If you're algorithm worked so well under a real-world scenario, why come to Bitcoin? Followup question to this is; Couldn't you have used your own money / profits from your algorithm, convert them to BTC, and operate your algorithm on the Bitcoin Exchanges without any help from us?


I look forward to your responses.

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April 22, 2013, 07:18:54 PM
 #37

Interesting.

There seems to be an awful lot of hazing (or harassment?) going on so I'll give you my perspective on this.

You need to try harder at proving yourself. You're using a new forum account created yesterday. You're making fairly large claims, but as far as I can see, haven't really proved yourself. Bitcoin assets aren't legally recognized (yet), so virtually nothing stops you from taking people's money and running. This causes quite a bit of skepticism in prospective investors. If you haven't noticed, there are only a couple genuinely successful assets at the moment, and of those, there is really only one that I'd be comfortable holding any sizable investment in. Those successful assets all have a few things in common though, their backed by either a great reputation and/or a something that's already in production release for anyone to see. Right now, you have neither.

I think the solution to the problem above would be :

  • Personally identify yourself (I know two of the most successful assets have done this)
  • Provide some kind of proof of earnings/concept.

Then we have problems with the IPO itself...

  • 100,000 shares at 0.2 BTC each. You're asking for 20k bitcoins (or $2.4 million USD at current exchange rate).
  • You're offering quarterly dividends on something that daily dividends would be easy enough to provide.

I feel like I don't really need to explain why those are problems, but I'll do it anyways... Putting first set of problems together with the second set just doesn't sit well, but lets ignore that. You want your bot to be trading 20k bitcoin, the market isn't even active enough for a HFT bot to effectively utilize 20k bitcoins. The next question is, what happens if the exchange you're trading on gets hacked/shutdown/or turns scam? How do you plan to minimize this risk? Why would dividends be paid quarterly when you could attract investors by (easily) automating daily dividend payouts and built in growth plan. How will reporting be handled? You could have a site with an 8 hour delay that feeds some kind of data on the bots actions. I've got plenty more thoughts on all this but I think for now, this is plenty to go off of.

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April 23, 2013, 04:07:48 AM
 #38

This is an IPO of an exchange traded fund (ETF). The underlying asset is the profit of a high frequency trading (HFT) algorithm created by State Trading Society (STS Ltd.)

STS Ltd. engages in algorithmic trading and derivatives research. The company’s trading algorithms currently run on electronic exchanges such as Nasdaq, BATS, EDGE, NYSE, and BTC-E.

Few questions on the company:
1) Who's the registered agent under STS Ltd?
2) What platform does the company currently use to execute HFT on the Nasdaq and NYSE exchanges?
3) Does the company currently have real-world investors that profit from the HFT?


Share capital is used directly for the trading algorithm. This is a computerized operation whose funding (for this ETF) will be from the ground up, much like how the mining companies operate. STS Ltd. will cover the IPO listing fees.

Specifications:
Exchange for listing: BTCT.CO BTC Trading Corp.
Shares: 100,000
Price: .20 bitcoins, but tbd by free market
Dividends: Quarterly or special dividends, TBD

Anybody that has ever lost money trading should understand the implications of this fund and why it would be good for them.

Transferring ownership of shares can continue even if the exchange goes down.

If there are any questions, skepticism or concerns, please PM me. This thread will be used to judge sentiment and post NAV.

Here's what I've gathered so far by reading this thread:
1) User creates an account on April 21st, 2013 and rapidly gets out of Newbie jail with the sole intent of getting into Securities
2) User creates a Securities listing asking for BTC20,000 (100,000 available shares) for their HFT "expertise".
3) Instead of pleading their case with evidence, User badmouths anyone who shows skepticism.

Here are my fund-related questions:
If you're algorithm worked so well under a real-world scenario, why come to Bitcoin? Followup question to this is; Couldn't you have used your own money / profits from your algorithm, convert them to BTC, and operate your algorithm on the Bitcoin Exchanges without any help from us?


I look forward to your responses.

1a) Incorp, that is in the public filings.
2a) DAS, IB API
3a) Yes. STS Ltd is in contracts with other entities in various capacities, such as Limited Partnerships between STS and other entities, where the LP gets the profits.

1b) Clearly Newbie jail is pretty pointless now
2b) Not a question
3b) I have been thinking about this throughout the day, and the "guilty till senior members stop heckling you" thing is pretty common here. Literally in every security and alt-coin on this site has this. How does anyone NOT have to be on the defensive in that situation? I am genuinely curious at this point. The skepticism I've felt compelled to respond to, out of bewilderment, has largely been about things not relevant to a successful fund.

Fund-related question: The same percentage gains over a finite period of time will simply be worth more if the capital is larger to begin with. I do operate it without you, it has done well. The traditional capital markets do not provide exposure to profits from high frequency trading algorithms for small investors, it would be marvelous to IPO such a thing here.
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April 23, 2013, 04:13:20 AM
 #39

Interesting.

There seems to be an awful lot of hazing (or harassment?) going on so I'll give you my perspective on this.

You need to try harder at proving yourself. You're using a new forum account created yesterday. You're making fairly large claims, but as far as I can see, haven't really proved yourself. Bitcoin assets aren't legally recognized (yet), so virtually nothing stops you from taking people's money and running. This causes quite a bit of skepticism in prospective investors. If you haven't noticed, there are only a couple genuinely successful assets at the moment, and of those, there is really only one that I'd be comfortable holding any sizable investment in. Those successful assets all have a few things in common though, their backed by either a great reputation and/or a something that's already in production release for anyone to see. Right now, you have neither.

I think the solution to the problem above would be :

  • Personally identify yourself (I know two of the most successful assets have done this)
  • Provide some kind of proof of earnings/concept.

Then we have problems with the IPO itself...

  • 100,000 shares at 0.2 BTC each. You're asking for 20k bitcoins (or $2.4 million USD at current exchange rate).
  • You're offering quarterly dividends on something that daily dividends would be easy enough to provide.

I feel like I don't really need to explain why those are problems, but I'll do it anyways... Putting first set of problems together with the second set just doesn't sit well, but lets ignore that. You want your bot to be trading 20k bitcoin, the market isn't even active enough for a HFT bot to effectively utilize 20k bitcoins. The next question is, what happens if the exchange you're trading on gets hacked/shutdown/or turns scam? How do you plan to minimize this risk? Why would dividends be paid quarterly when you could attract investors by (easily) automating daily dividend payouts and built in growth plan. How will reporting be handled? You could have a site with an 8 hour delay that feeds some kind of data on the bots actions. I've got plenty more thoughts on all this but I think for now, this is plenty to go off of.

I will be continually evaluating what disclosures are relevant to this community. As it appears the technical disclosures I've made are not as relevant here as they would be in the established capital markets. I'm not opposed to personally identifying myself I just cannot completely foresee the consequences of how it will lead to a successful IPO.

I am aware of the regulatory challenges here, my opinion is that I can run a successful algorithm fund here in a growing market. This is something I am willing to put energy into, where others are all trying to divide up mining profits. I am excited by the prospects of it growing larger and larger possibly becoming the defacto fund.

I have addressed liquidity concerns already. This venture is denominated in bitcoins yet will be trading bitcoins, other cryptocurrencies, stocks, and other more liquid markets. The algorithm reads order books and decides how much liquidity it can handle. It also has position size and portfolio management limits. There would literally never be 20,000 bitcoins worth deployed at a time.

Regarding daily dividends, this market will simply have to get over what the plethora of mining companies have decided to do. The profits alone can increase the NAV much faster. This offering is not structured like a mining company. It is a different sector.
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April 23, 2013, 05:09:47 AM
 #40

You act like this forum only has mining securities. No, there's a ton more, and this is one of the shittier ones (like that Joker one).

The downside of a quarterly dividends is that you're able to try to get as much shares sold as possible for 3 months, dump all the shares on the orderbook, and then run away without paying a satoshi.

This isn't "innocent until proven guilty", you need to prove that (i) you can be trusted (ii) you are actually competent at what you do, and actually has a trading algorithm and (iii) that it makes a profit.
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