Chapter 98 Classroom Discussion Chen Yi unconsciously straightened his back.

  High-frequency trading is now his biggest capital for making money.

  Any resource, only through a certain mode, can be converted into cash, has real value. The magical subway he owns is produced by skill copying scrolls, then by supercomputers, and finally by high-frequency trading, which generates direct benefits.

  With this layer, he can relatively fully utilize the magical subway.

  If anything is missing from among them, everything will be greatly discounted.

  Just look at the rulers of Africa, they have diamonds but are not allowed to sell them in the free world; they have ivory but are not allowed to trade it on earth; they have minerals but no ports and rail transport, from the 20th century to the 21st century, they are equally rich and equally poor.

  If there were no high-frequency trading, or if it were a foolish child, perhaps the supercomputer would be used to steal QQ numbers and game accounts, which would be a waste of resources.

  On stage, Ray Dalio started from the origin of "high-frequency trading" and then talked about the methods currently being applied on Wall Street.

  Such a unique stock trading method has obviously attracted the attention of countless students.

  Professor Lei said in a definite tone: "In the future, financial stocks will inevitably be influenced by high-frequency trading. If you have the opportunity to trade stocks or futures, you must constantly study it. From current data, institutions operating supercomputers generally have daily returns of over 1%. Let's calculate the compound interest, which exceeds 12 times in a year. For institutions that operate relatively well, it's hard to say, but several hundred to several thousand times are possible..."

  He scribbled on the blackboard, Chen Yi secretly despised him, my daily profit is over 50%, what's that broken computer of yours.

  However, a 12-fold profit is considered excessive in the eyes of ordinary people. Han Jie put down her teacup and thought to herself: "In that case, buying a supercomputer would be very profitable?"

  For traditional industries, a 30% annual profit is satisfactory enough to let the boss sleep well at night, while a 50% profit is considered rich and can keep other bosses awake at night.

  Her thoughts were almost the same as Chen Congyu's.

  Moreover, both are generally similar, and they are really people who can afford a supercomputer.

  Chen Yi sipped his tea and explained, "That thing has a limit to its calculations. Moreover, the market is only so big, investment not only includes hardware and software, but also interest expenses, personnel salaries and commissions, it's hard to recover costs within one or two years. The fixed capital investment is too large."

  "A slow computer can be attacked by a fast computer, which may cause losses. The price of a fast computer is too high, and how many resources to set up to attack others is also a problem."

  "Now there aren't many high-frequency shoppers, but in the future, I think it will be a war of hundreds of teams."

  "Not a particularly fast supercomputer, still subject to the exchange, and as a parallel service provider, it's a huge expense every year."

  What he said was very moving.

  Don't look at him now earning millions of dollars every day, but this is based on the ultra-high performance and zero cost foundation of building Sea Monster.

  Mermaids can make excessive profits from the lightning trading process of monopolizing half of the New York Stock Exchange. Other traders don't have this skill.

  Even giving them a small trading house is impossible.

  If the cost of Sea Witch is included, the annual budget for the University of Wisconsin–Madison's computer center is $1 billion, with 85% coming from federal funding and the rest being covered by the state of Wisconsin.

  Including other projects at the computer center, there are as many as 3,800 employees surrounding "Kraken" and more than 3,000 visiting researchers - the latter of whom work at the computer center for two weeks or slightly longer each year - who study a variety of projects including high-performance computing and provide support for further upgrades and maintenance of Kraken.

  Although Chen Yi's Jin Yuan International only secretly used about 15% of the performance of "Hai Yao", this part of resources actually belongs to the design margin. Because "Hai Yao" cannot be updated and replaced every year, while the needs of research projects are increasing every day, so in the second half of this year or early next year, the resources they can use will become less and less. This is equivalent to the loss of a supercomputer.

  There are many wealthy people on Wall Street, but those who can take out tens of billions of dollars in their own capital to customize a cross-era supercomputer and wait for two or three years to deliver it, and then spend hundreds of millions of dollars in capital to buy land and hire employees to build a computer center, that is definitely one-of-a-kind.

  For a one-time capital injection of this magnitude, if it were to be made through a bank loan, those bloodsuckers would dare to demand an annual interest rate of 40%, and there would certainly be more than 100 pages of terms and conditions, and more than 10 pages of additional requirements...

  That's why, with high-frequency trading still in its infancy and profit prospects uncertain, most traders opt for big iron. The few who choose supercomputers are those with deep pockets and a strong background - they often think that if they don't make money, they can just donate it to their alma mater.

  Lei Gong's 1% daily profit is built on the foundation of large machines and ordinary supercomputers. Their computing power is general, not qualified to compete with Sea Witch.

  However, their competition with each other is becoming increasingly fierce.

  From Chen Yi's perspective, if any trader's computer performance reaches more than one-third of "Hai Yao" and mainly trades on the New York Stock Exchange, their profit will be reduced by more than 70%, because their own supercomputer has to devote most of its energy to defending against enemies rather than plundering retail funds.

  If two trading firms' computers reached this number, the "Kraken" would bring in no more than $5 million per day in profit - not even enough to cover its own depreciation.

  Furthermore, if high-frequency traders' computer performance does not continue to improve, the NYSE's attitude will also become ambiguous.

  They are still in active contact with Tang Xiongfei and others, but the final result is difficult for both sides to predict.

  Chen Yi was lost in thought for a while and didn't speak for half a day. Han Jie quietly poured him tea.

  Some classmates sitting around were originally discussing it, now hearing his comment, feeling reasonable, but also unbelievable.

  They were too embarrassed to talk to Chen Yi, so they talked among themselves there.

  However, for students who have just entered university, their horizons are not yet broad enough. Only a few people can understand the value of 100 million yuan. I only heard someone comment: "Even if that supercomputer is worth tens of millions, I think it's still profitable. Unfortunately, I'm not in the US, otherwise, I would definitely try to get one. Also, if there really is a 12-fold profit in a year, why not take out a loan to buy?"

  Chen Yi couldn't help but curl up the corners of his mouth.

  Borrowing from banks for two or three years to make fixed capital investments? That's not a financial merchant, that's being a railway department worker for the bank.

  Han Jie knew Chen Yi well and asked in a low voice: "Not enough?"

  "Even with dollars, you can't buy good things."

  He had just finished speaking when Professor Lei on the stage said: "Are you all thinking now that this money is easy to make?"

  "It is..." some students shouted in unison.

  "It's actually not easy to make a profit." Lei Gong began writing on the blackboard: "High-frequency trading is a financial product that requires extremely high capital density. Think about it, one share of stock averages around $10-$15, if you rely solely on the exchange's rebates (kickbacks), 100 shares would only earn 20 cents, which means $1,000 would only earn $2.50, and $100,000 would only earn $25. Of course, their trading speed is extremely fast, but no matter how fast the trading speed is, filling up a computer with funds still requires hundreds of millions of dollars, and to form an advantage, $1 billion is not enough..."

  After finishing writing this, he chuckled twice and said: "Now, don't you feel a bit more difficult......"?

  The people around Chen Yi looked at him with a curious gaze.

  What he said was surprisingly the same as what the professor had said, just expressed differently...

  Fortunately, there was some order in the large classroom, so the students' whispers didn't spread too far.

  Lei Gong's style is open to discussion, and he himself also lectures as usual.

  However, the students' current focus of discussion has become the perspective of onlookers. They no longer fantasize about being the main characters, but rather make plans and strategies for participants in high-frequency trading.

  But the guys around Chen Yi focused more on this guy, and fewer people commented out loud. Nobody likes to be a show-off.

  Chen Yidang was sipping tea, occasionally exchanging a few words with Han Jie.

  He himself is doing high-frequency trading, although he can't be called a master, he's at least an old hand. What he says has basis and is quite different from other people's speculative language.

  There are direct and incisive words between sentences, which is what students lack.

  Perhaps, after they work hard to learn, graduate with honors, become top students above 5% of their age group, have the opportunity to further study at a world-renowned university, then struggle on Wall Street for three to five years, gain recognition from the top, and personally manipulate transactions for a year, accumulating enough experience, can they have sufficient understanding.

  Alternatively, like Professor Lei, who specializes in the study of economic and financial theories, when he becomes famous and older, he naturally gets to know many financial institution leaders, receives invitations from various financial institutions, analyzes examples, and draws conclusions.

  Lin Yan was sitting not far in front, she could hear what Chen Yi said, but she didn't speak to discuss. Seeing that he was always right, she couldn't help but think: Although he is a spoiled son, he still has some real talent and learning, it seems that he relied on his own ability to pass the entrance exam of Jiangda University.

  The unpleasant feeling towards Chen Yi suddenly decreased a lot.

  The students listened attentively, and the professor lectured with great enthusiasm.

  Chen Yi straightened his back, preparing to listen further, when Lei Gong suddenly changed the subject and began talking about the drawbacks of high-frequency trading.

  "Chain reaction is the most critical aspect of high-frequency trading..."

  Chen Yi listened, his eyebrows gradually furrowing.

  To him, Professor Ray J Ball generally views high-frequency trading from the perspective of ordinary people - for example, chain reactions will cause stock market fluctuations, ultra-fast transactions will lead to new injustices, and the 2% volatility pursued by high-frequency traders will make the market over-volatile...

  However, as a high-frequency trader entering the market, Chen Yi's feelings were entirely different.

  To make money in high-frequency trading, market volatility is indispensable, which is also a prerequisite for the existence of market makers.

  As for the chain reaction, unfairness and injustice, it contains both risk and cost. If financial markets were to operate in the direction that ordinary people hope for, then what is called the world economy would not exist at all. All of humanity, unless they return to a self-sufficient agrarian society, will always have someone who is dissatisfied.

  Furthermore, if financial markets move in the direction that ordinary people hope for, the final result is likely to be that nobody is satisfied.

  The professor spoke for about 10 more minutes before starting the regular lesson.

  Chen Yi stuck a scroll of intelligence on himself, listening to the lesson while thinking about his own affairs.

  The class time passed very quickly.

  As soon as class was over, Chen Yi rushed to the podium like a good student, still holding a cup of tea in his hand.

  He stepped in front of Lin Yuen, the class leader, and asked first: "Professor Lei, how can we increase the profit from high-frequency trading and flash trading, and how can we take advantage of their monopolistic position?"

  A sharp reality suddenly stopped Professor Lei in his tracks.

  ……