We are no longer a Social Network

You may have thought Massive Rainfall was some sort of stock exchange, except that insider trading is impossible. But it actually is [was] a social network where people could come together an interact.

That the interaction was mostly financial in nature and that you were only connected marginally by some sort of matching order system is also true. The social aspect was somewhat muted.

That it was a network should also have been obvious. Without other people there is no one to trade with. As the network grows, so does the number of people interested in your social interactions (your Orders for weather securities). Those of you in a given city will likely interact for the same group of securities. QED

But now I must admit that trading volumes on this site are small. Without the mass effect where an idea or meme takes on a life of its own and is propelled larger and further than ever before, a social network dies. So I’ve followed Ashley Madison’s alleged direction and introduced automated (or fake) entities to interact with.

Specifically, I’m getting ready to introduce High Frequency Traders (HFT’s) to increase the number of interactions (read: Bids and Asks on every Weather Derivative) to lower the spreads between those attempting to buy and those attempting to sell a derivative for a given City for a given Expiry Date. This will allow real people traders to get a [better] price on a security that may not have received attention from other people traders.

Here is the simple algorithm. Feel free to critique and offer alternatives, or game it later for “profit”.

High Frequency Traders Behavior:

  1. Cancel all previous Orders entered by the HFT that have not been filled
  2. Find all existing securities that have a weather forecast
  3. Enter the following Rainfall Orders:
    • Bid on the Rain level [Forecast – 1, unless Forecast <= 1, then 1]
    • Ask on the Rain level [Forecast + 1 unless Forecast<=1, then 3]
  4. Enter the following Wind Orders:
    • Bid on the Wind level [Forecast – 1, unless Forecast <= 1, then 1]
    • Ask on the Wind  level [Forecast + 1 unless Forecast<=1, then 3]
  5. Enter the following Temperature Orders:
    • Bid on the Temperature level [Forecast – 1, unless Forecast <= 1, then 1]
    • Ask on the Temperature level [Forecast + 1 unless Forecast<=1, then 3]
  6. Add to list of Orders entered by the HFT

The purpose of this HFT is for market making – should anyone worry I’m violating the Volcker Rule for financial institutions.

Bitcoins Are Commodities

See the Bloomberg story.

I thought that this was obvious and created a bit coin futures exchange as a result (which didn’t go anywhere and I may have shut it down). But this is a big deal for some and I expect that this will smooth out some of the volatility as any price jumps are pounced on by arbitrage traders.

Good for them. I gave up trying to stay current on crypto exchanges because they are inherently worthless and it’s impossible to gauge the price correctly.

Like gold.



MeteoSwiss Upgrades Their Forecasting Super-Computer

CNN reports on the story where the Swiss Meteorology has upgraded to a GPU powered Cray Super Computer to improve their forecasts:

“To guarantee more detailed weather forecasts, the simulations will be based on a grid spacing of 1.1 kilometers, which runs recurrently every three hours,” said Peter Binder, Director General of MeteoSwiss. “This grid spacing makes it possible to predict with more detail the precipitation distribution and the risk of storms or valley wind systems in the Swiss mountains.”

They’re down to a 1.1 km resolution and it runs every 3 hours? Plus the new system reduces power requirements. Plus  the “grid spacing makes it possible to predict with more detail the precipitation distribution and the risk of storms or valley wind systems in the Swiss mountains.”


Approval Limits

So… there’s no approval limits apparently that prevent users from creating massive positions. That’s a bug, not a feature:

Also: How was there only 0.23mm of rain?!? I was right! Just not right enough…


Retrieving Weather

I spent part of my Saturday looking at why the Futures Pricing wasn’t working. I had a complicated SQL query that took forever that tried to pull the latest date and its weather forecast. It took over 60 secs to run (for each security) and worse, it didn’t work.

A new query was instantaneous and populates with the last forecast made after the date (what one would expect is the actual weather). I’m assuming and still need to confirm that. I also wrote in code to not abuse Weather Underground – no more than 10 per minute with a maximum of 500 active cities per day – otherwise I should actually pay them something.

UPDATE: the rainfall (or wind/temp) is based on the previous day’s forecast, not the actual. I still need to fix that, otherwise it only encourages those who guess what the future forecast will be, rather than what the actual weather becomes.