High-Speed Futures

Optioning the Risk at High Speed

Risk associated with options and futures is arbitraged against a settlement date. As the date approaches (t-T) its value undergoes a euclidean-algorithmic reduction, being reduced to its real, present value (its current useful value) that yields to the greatest common divisor.

For the HFT, the future is always now. If your future is now, being overadvantaged at high frequency by Wall Street quants, what happens to the capacity (the probable risk) of self-determination. If risk cannot be removed, then what happens to it?

(Your space and my space, collectively, over time, is the probable risk.)

Since risk cannot be removed, its associative quantum value (measured by the distributive value of the reward) naturally accumulates into a catastrophic proportion.

An HFT contains probable risk by “making markets.” It “makes” the market to “take” the reward.

Being on the take is not limited to HFTs and equity markets but reflects the way financial markets generally work. (So, take the raging HFT debate among financial elites and apply it to your self. Apply it to your relationship with the financial elite, always on the take, making you take all the risk by algorithmic default. Essentially, the top one-tenth of one percent is frontrunning your existence and then telling you your fate is self-determined and no one is culpable but you. The probability, you see, of indefinitely sustaining this small number of beneficiaries in a too-big-to-fail dimension is absolutely zero because, technically, it’s incorrect. To keep the value undefined, and technically correcting, by default, to favor elite control by mechanical device, it always exists in the futures. The risk, naturally subjected, by default, to technical correction, is swiped and swapped…fenced…in dark pools, modeled to re-present as being ontologically derived from mysterious forces of nature under the All-Seeing Eye poised atop the pyramid scheme of life.) This working model of “the existence,” although not directly visible (and even in the case of financials, existing in “dark pools”), is reflected in the “real economy” by imperative extension. It preoccupies space in the futures “now,” existing in the form of economic rents.

The model tends to create problems to be solved. Operating with the extension of rents, which always results in default against regressive earnings rates (the incapacity to pay the rents, which yields to a declining rate of profit), the tendency for technical correction is satisfied. By extension, with the probability yielding to the intendency, the model of capitalism is preoccupied–it is obsessed–with the probability of available space in which to self-determine.

(Currently, for example, financial analysts are describing and explaining strong support for equity valuations against a weak economy.

Look at how this works.

Small investors are crowded into a small space. Otherwise, the yield is negative. Now, after years of a zero rate of interest, “yielding” to the intendency, the deflation monster is hungry to gobble up gains the over-forty crowd has regained since the Great Recession. If you thought it was over…it’s not over.

Big investors value small investors in their space because it satisfies the zero-sum game. Being told that volatility–risk taking–is the place to be if you want yield, small investors have been headed up, moved out, and herded-in to occupy a space defined as the risk to be avoided.

Selling a strong deflationary trend as a slow recovery, having been supported by debt monetized with negative equity, the herd is now fattened up for the slaughter.

The herd–“the crowd”–is supposed to be, and can be, the ethological wisdom of a free market. While the risk cannot be reduced, always existing fully valued and discounted to the expected value of its realization, the crowd reduces the spuares–the sum certain–to the greatest common denominator.

Although the crowd has the ethos–the “sense” Hobbes would say–to operate legitimately, with full propriety and culpability on demand, the people are being herded into detriment by a bunch of rustlers who claim we all just wander into the slaughter house by default.

While financial analysts tend to agree that equity valuations are too high, they intend not to say why.

A “valuation correction” is expected to occur because the classic, recurrent, economic problem of capitalism is a declining rate of profit. The capital becomes so consolidated that, by default, the rents cannot be paid.

Capitalism is prone to critical failure. Since its dis-ease is chronic–conserved–occupying space over time, it has to be built into a too-big-to-fail proportion. It must exist as an incorporate body, having a god-like attribution that occupies space over time, merging and acquiring to survive, consuming its self into “the inexistence.” Its errors are fundamental, existing with fatal misattributions of objective reality or what existentialist, Jean-Paul Galibert aptly describes as “a negative ontology.”

Since the more capital gained the less capacity to support the marginal profit, the only thing supporting equity valuations is buying and selling to yourself, using Fed funds, of course, which means that reward is to be gained, illegitimately, without risk. As prices rise, the herd tends to try and run with the momentum for yield, but when corralled the slaughter begins. All the capitalist has to do is stop buying and start selling. This, you see, is nothing but a racketeering scheme, but it is sold as “objective reality” managed by “the best and the brightest.”

Eventually, the crowd figures out that capitalism is more a racketeering scheme–algorithmic arguments, or “if-then” statements, that create arbitrage events–than a way to efficiently “make markets” and allocate capital to create jobs and cure shortages at the same time.)

Capitalism, by design (yielding to the intendency which, remember, tends to correct by default), is preoccupied with the “objectivity” (the Objectivism) of its self-determination. It is obsessed with objective, proprietary measures (deliberately designed and patented as “business models”) in which to distribute risk and reward.

Capitalism is modeled to intend (“if”) the risk to yield (“then”) the reward. The “if-then” statement algorithmically models the recurrent risk as an obtaining, “objective reality,” which is a fraud. The fraud, however, is perpetrated with highly technical attributions. It is steeped in complexity, “being” technically indicated by the sign readers–the seers, the witch doctors of Wall Street where dis-ease is cured with a good dose of “objective reality.” The fraud is a technical “argument” about the futures–it is a formulated attribution–and when the future is now, and you have been “taken” by the fraud, an arbitrage event has occurred that derives reward from taking the risk. (Articles on the “arbitrage argument” by griffithlighton can be found on the World Wide Web.)

If capitalism naturally intends, or is prone, to fraud, then it must preoccupy the available space in which to self-determine. Being preoccupied, with the arbitrage argument (the formula for determining the futures forward) reoccurring over an over, the argument is made that the distribution of risk and reward naturally obtains.

(Notice that it looks like reward legitimately derives from the risk, but no, the reward is intended by avoiding risk, not taking it. “If” markets can be made more efficient, by means of consolidation, “then” risk can be modeled to accumulate reward without risk.

Reward without risk, as Thomas Hobbes observed, is delusional if not psychotically self-destructive, and like he said, this “nonsense” is self-correcting. The value is naturally retributive–it is imperative–in priority, always yielding to the intendency.)

Preoccupation is absolutely essential to the success of the capitalist model. It is obsessed, fully contained in priority, with the probability (the technical correction–the space over time) of objective purpose.

Without an ontological description of purpose there is no resistance to the occupation of space over time. The opportunity to swap the objective purpose of the existential model naturally obtains in all the futures because capitalism, by its own mechanical devices, always operating in the futures now, always begs the question, which is a logical fallacy.

Nature does not operate fallaciously. Its squares are perfectly summed (reducing to The Greatest Common Denominator, which is nameless). A fallacy always stands (conserved) to be corrected, yielding to the intention (the imperative, proprietary value) of its existence.

By the law of large numbers the question will always be answered. The risk will always admit to the liability on demand (by default) because the rent, by extension, must be paid or the probability (what yields to the intention) flat lines (it is spent–fully valued, existing with no future).

It is like taking a short interest in the futures. While the probability may look good, the possibility is infinitely bad. In zero-sum there is really no way to option the probable risk. The date is already settled. The probability exists in priority, fully culpable on demand with the ever-present value (the preoccupation) of the All-Seeing Eye, commanding the risk by imperative, seeing all the futures (knowing) at the highest possible speed.

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About griffithlighton

musician-composer, artist, writer, philosopher and political economist (M.A.)
This entry was posted in Political-Economy and Philosophy and tagged , , , . Bookmark the permalink.

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