For those who want a rough programming analogy here -- this sounds like support for multi-row transactions in a SQL database where only single row edits were allowed before.
Now you can describe "buy goods A and B at $10 maximum, commit" and have the transaction either succeed or fail. Before you had to edit those rows individually and there's risk that you end up in a weird partial state, hence having to lower your bid to cover your risk.
Really exciting tech and it'll be great for these costs in market-making to be eliminated!
Love that analogy—thanks! Combinatorial auctions are in large part about ensuring atomicity. Traders call it legging risk. Auction theorists call it exposure risk.
Comments
For those who want a rough programming analogy here -- this sounds like support for multi-row transactions in a SQL database where only single row edits were allowed before.
Now you can describe "buy goods A and B at $10 maximum, commit" and have the transaction either succeed or fail. Before you had to edit those rows individually and there's risk that you end up in a weird partial state, hence having to lower your bid to cover your risk.
Really exciting tech and it'll be great for these costs in market-making to be eliminated!
Love that analogy—thanks! Combinatorial auctions are in large part about ensuring atomicity. Traders call it legging risk. Auction theorists call it exposure risk.
Thanks! :) good analogy and spot on about the market-making costs - hedging atomically as an EMM could unlock quite a lot in the way of liquidity.
Fantastic analogy, thanks.
Thanks for the TLDR I was never going to make it through their Bastille of text