Category: Technology

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Part 3

About this article:
In the previous write-up on this issue we discussed certain important aspects about cloud computing including key terminology and some offerings. This write-up focusses on certain issues which would require consideration before one decides to opt for cloud services.

Background:
Cloud computing basically refers to providing the means through which everything i.e., from computing power to computing infrastructure, applications, business processes to personal collaboration, can be delivered to you as a service wherever and whenever you need. This model is fast emerging as the choice of several large and small businesses. The choice is quite natural considering the (assured) cost savings. Such savings can be either in the form of lower capital expenditure on hardware, software licence, infrastructure or in the form of lower operational expenditure i.e., operation and maintenance expense or reducing idle time, downtime, etc. (refer to the write-up titled Cloud computing basics — part I published in BCAJ April 2011 issue).

Businesses, large and small, have several options, between whether to opt for private or public or hybrid clouds (refer to the write-up titled Cloud computing basics — part II published in BCAJ May 2011 issue). Having several options itself, sometimes, becomes a hurdle while making strategic investments. Cloud computing also brings to the fore certain unique concerns, concerns which are more significant from the ‘enterprise’ point of view.

Primary objective of moving to the cloud:
As organisations evaluate how cloud computing can achieve these advantages, they are faced with numerous choices. While moving to the cloud has definite advantages such as — improving business agility, reducing management complexity and controlling costs, etc., one needs to appreciate that simply moving towards a service-oriented cloud computing model does not automatically deliver benefits. To derive maximum benefit and Return on Investment (ROI), cloud computing needs to be considered as part of a larger move towards more effective management and integration. Needless to say inadequate planning and half-baked cloud computing solutions may add complexities rather than reduce them.

Some myths and some clarifications:
While there are several myths and misconceptions associated with the topic of cloud computing, the ones that the readers of this journal are more likely to identify with are:

Myth 1:

Data security: Will the cloud service provider guarantee security?

One common concern amongst businesses looking to move to cloud computing is data security. Primarily, moving to the cloud entails — parking your data with the service provider, this can be a discomforting thought. The very possibility of threat to confidentiality and security of the data is the source of discomfort.

From a practical standpoint, public cloud datacentres are amongst the most secure premises on the planet. Yet, at the logical level, a cloud provider with every security certification still can’t guarantee the integrity of specific servers, applications, and networks, if your applications are poorly written, set up and secured. Similarly, all the security practices of a cloud provider are meaningless if a customer organisation’s security practices are weak.

The key take-away here is that there are several layers of security to protect your data, but there is always a possibility of chinks in the armour.

Myth 2:

Data control: My organisation will be locked into one vendor and lose control of its data, if it moves to the cloud:

Almost every organisation would acknowledge that businesses need to store shared files securely. This would assume more importance when the organisation is engaged in providing medical, legal and financial services. These organisations are subject to strict local laws.

If one believes that the best way to keep your data a secret is to manage it yourself, then the moot question would be why stash your precious data offsite?

It is relevant to point out that the essence of cloud services is ‘flexibility’. One application may call another on a different cloud service, and data may be stored anywhere, including your own network, but still be accessible to cloud applications. No cloud provider offers a service that completely takes control of your environment. The best cloud solutions will be a combination of on and offpremise services.

The key take-away is that while the service provider may control the infrastructure, the data is not entirely in his control. Sure!!! he controls your access to your own data, but his primary interest is merely optimal utilisation of his resources (just like you).

Myth 3:

Cost savings: An organisation must move all its applications to a cloud service to be able to benefit fully from cloud computing:

Moving an entire datacenter to the cloud is a tall task. Practically, no cloud provider would recommend this, at least not at one go (if you ask me — you are inviting trouble). Ideally, one should adopt a step-by-step approach. One should start by identifying applications in his pipeline that can benefit his organisation by being in the cloud. Look for applications where resources are used intensely for a short period each month then left idle for the rest of the time, or applications where a moderate level of resources are used continuously, but experience ‘periods’ of very high activity.

Such applications are ideal cloud candidates. This is so, because the cloud can scale up and down resources on demand. The cloud is built for flexible access to resources that can be allocated to other applications, or even other customers, when idle.

The key take-away is that one should do a cost benefit analysis of all activities undertaken and gauge the advantages/disadvantages of shifting to the cloud. A proper evaluation would also ensure that you minimise disruptions and costs associated thereto. Who knows, the sum of all parts may be greater than the whole.

Myth 4:

IT role changes: Do I still need an IT administrator?

The role of the Exchange Administrator does not become obsolete due to the cloud. There are still many tasks that remain on-premise. You still have to manage your users and their mailboxes. Industry-specific data retention compliance, as well as implementing custom workflows, is still your responsibility. While some tasks may no longer reside on-premise, managed cloud services free up your time to engage in more strategic roles, providing you with new opportunities.

Apart from patching those servers and physically maintaining them, all other aspects of managing applications remain in the IT administrator’s hands. Monitoring, updating, integration with services such as Active Directory, security and network monitoring — these task are still required within organisations utilising cloud services.

The key take-away is that the all powerful IT administrator’s role is impacted, but the role does not get diminished. The IT administrator’s role will evolve as the availability of compute cycles and networked storage increase — that is a given, just as the IT role has evolved in the past. The question IT administrators must ask themselves is, ‘Am I prepared to play a more strategic role in my organisation?’

Myth 5:

Getting started: All you need is your credit card to start cloud computing:

You can begin using cloud computing services with just a credit card. This is a good way to get experience with this new frontier of services, in fact some of the basic services may be available free. Most cloud services provide an environment designed for getting started and developing applications.

It is important that one gets used to the concept and gain comfort. Post this one may evaluate the advantages/disadvantages of moving to the cloud.

The key take-away is take small, measured steps. Learn from experience before betting it all.

In summary:

There are pros and there are cons, also there are hyped stories of success and spiced-up stories of failure. Readers may well be cautioned to do their own research and allay their fears of this emerging service. While the service provider may promise you the moon, one should pare his expectations and make investments only upon realising measured benefits. In short, look before you leap!!!!!!!

High-Frequency Trading (‘HFT’) has been around for many years now. In spite of this, very little is known about HFT. Ever since the beginning, people in general have either sung praises or spoken of the dark side of HFT. The purpose of this article, however, is not to dwell on the merits or demerits of HFT. Instead, this article is to depict how technology is used in this trade and the basic mechanics of HFT. The technical content has been kept at a bare minimum and logical/practical aspects have highlighted wherever possible.

Background

Once upon a time trading in stocks, securities, commodities, etc. was done on the ‘exchange floor’. Back then, ‘trading’ was a fairly straight-forward affair. Buyers and sellers gathered on exchange floors and heckled with each other until they struck a deal. Those were the heady days of power, pressure and sentiments. However, trading on the exchange floor had its own limitations and the trading practices were plagued with malpractice.

In case you have never had the chance to see how trading took place in the olden days or experience it, check these movies — English movies — Trading Places, Wall Street, Hindi movie — Guru.

By mid-nineties, computers and technology started gaining prominence. The ability of a computerised system, to flawlessly execute transactions, match buy and sell orders, etc., was growing exponentially. Then, in 1998, the Securities and Exchange Commission authorised electronic exchanges to compete with marketplaces like the New York Stock Exchange. The basic intent was to open markets to anyone with a desktop computer and a fresh idea. This objective was achieved largely.

Apparently, (as per data published by NYSE and other public sources) between 2005 and 2009 the trading volume (on the NYSE) grew about 164%. News reports have credited HFT for a large part of this meteoric rise. As a matter of fact, there are some who say that in the United States (US), while high-frequency trading firms represent 2% of the approximately 20,000 firms operating, they account for 73% of all equity orders volume. Currently, it is estimated that HFT trades account for 56% of all equity order volumes in the US, 38% of trades in Europe and 5-10% of trades executed in Asia.

Making money out of thin air

HFT became most popular when exchanges began to offer incentives for companies to add liquidity to the market. For instance, some exchanges have a group of liquidity providers called supplemental liquidly providers (SLPs), which attempt to add competition and liquidity for existing quotes on the exchange. As an incentive to the firm, the exchange pays a fee1 or rebate for providing the said liquidity. Rumour has it that the SLP was introduced following the collapse of Lehman Brothers in 2008, when liquidity was a major concern for investors.

High-frequency traders also benefit from competition among the various exchanges, which pay small fees that are often collected by the biggest and most active traders — typically a quarter of a cent per share to whoever arrives first. Those small payments, spread over millions of shares, help high-speed investors profit simply by trading enormous numbers of shares, even if they buy or sell at a modest loss.

HFT made simple

HFT is a program trading platform that uses powerful computers to transact a large number of orders at very fast speeds. HFT uses complex algorithms2 to analyse multiple markets and execute orders based on market conditions. Typically, the traders with the fastest execution speeds will be more profitable than traders with slower execution speeds.

Powerful algorithms — ‘algos,’ in industry parlance — execute millions of orders a second and scan dozens of public and private market-places simultaneously. They can spot trends before other investors can blink, changing orders and strategies within milliseconds.

Basic mechanics

The mechanics of such systems coupled with complex algorithms are not standardised. Conceptually, the design may be broken down as follows:

•     The data stream unit i.e., the part of the systems that receives data e.g., quotes, news, etc., from external sources.

•     The decision or strategy unit

•     The execution unit.

These systems are very intelligent and make use of social networks, scanning or screening technologies to read posts of users and extract human sentiment which may influence the trading strategies.

Characteristics of a HFT system

HFT can be characterised as under:

•     It uses computerised algorithms to analyse incoming market data and implement trading strategies;

•     HFT trading strategies are for investment horizons of less than one day. The primary game plan is to unwind all positions before the end of each trading day. An investment position is held only for very brief periods of time i.e., from seconds to hours. The system rapidly trades into and out of those positions, sometimes thousands or tens of thousands of times a day;

•     At the end of a trading day there is no net investment position. Since they must finish the day flat, HFTs exhibit balanced bi-directional (i.e., ‘two-way’) flow. It is argued that due to this feature HFTs can’t accumulate large positions.

•     HFTs can’t deploy large amounts of capital, infact, HFTs have little need for outside capital or leverage, and tend to be proprietary traders. In theory, HFTs can’t ‘blow up’ (they don’t use much leverage, and don’t have much capital, so they can’t lose much capital!);

•     Generally employed by proprietary firms or on proprietary trading desks in larger, diversified firms;

•     It is very sensitive to the processing speed of markets and of the traders own access to the market;

•     Positions are taken in equities, options, futures, ETFs, currencies, and other financial instruments that can be traded electronically;

•     High-frequency traders compete on a basis of speed with other high-frequency traders, not (supposedly) the long-term investors (who typically look for opportunities over a period of weeks, months, or years), and compete for very small, consistent profits;

•     HFT is a very low-margin (low-risk, low-reward) activity;

•     Theoretically speaking, HFTs follow a Gaussian (Normal) distribution. Their logic is simple i.e., large expected returns are rare and tiny expected returns are abundant;

•     For the HFTs, opportunities are short-lived because they are very small and they are heavily competed for;

•     Economics of HFT requires identification of large quantities of trading signals, which is highly technology-intensive. Success or failure in this case is determined by the HFTs speed i.e., speed in capturing opportunities before they are accessed by competitors.

Standard HFT strategies

Most high-frequency trading strategies fall within one of the following trading strategies:

•     Market making: involves placing a limit order to sell (or offer) or a buy limit order (or bid) in order to earn the bid-ask spread. By doing so, market makers provide counterpart to incoming market orders;

•     Ticker tape trading: much information happens to be unwittingly embedded in market data, such as quotes and volumes. By observing a flow of quotes, high-frequency trading machines are capable of extracting information that has not yet crossed the news screens;

•     Event arbitrage: certain recurring events generate predictable short-term response in a selected set of securities, HFTs take advantage of such predictability to generate short-term profits;

•     High-frequency statistical arbitrage: this strategy requires the HFT to exploit predictable temporary deviations from stable statistical relationships among securities.

HFT the dark side

High-frequency traders often confound other investors by issuing and then cancelling orders almost simultaneously. Loopholes in market rules give high-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits — and then disappear before anyone even knows they were there.

HFT came into spotlight about two years ago when a very large Wall Street firm sued one of their former employees for stealing code that was used in one of their programs used to execute this type of trade. When the former employee (programmer) was accused of stealing secret computer codes/software — that a Government prosecutors said could ‘manipulate markets in unfair ways’ — it only added to the mystery be-cause the Wall Street firm acknowledges that it profits from high-frequency trading, but disputes that it has an unfair advantage.

It is rumored that in May 2010 — a flash crash took place in the Dow in which several companies and blue chips lost a lot of their value in a matter of minutes, and the New York Times reported that shares of big companies like P&G and Accenture saw ridiculous prices like a penny or a $100,000. The prices were later restored to more usual levels.

Even in India — BSE cancelled all the futures traded on in one of the trading last year, and at least an initial report blamed an algo trader from Delhi for causing havoc because of their trades.

In spite of the fact that HFT has been around for more than a decade, even today, very little is known about HFT and Algorithmic trading. Only recently regulators like the SEC and SEBI has started asking some questions. In fact, if the readers are interested they may look up the recent guidelines issued by SEBI on this issue. SEBI’s endeavour is to contain possibilities of systematic risk caused by the use of sophisticated automated software by brokers.

There are several questions like how do these programs work, what are the triggers, is there a risk and do these programs provide an undue/ unfair advantage to the user. Only time will tell.

Disclaimer:

This article is only intended to create awareness about HFT. The contents of this article are based on various stories, articles, research papers, etc. currently available in the public domain. The purpose of this article is neither to promote, nor malign any person or a company mentioned in the article.

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About this write-up:
This is the third and concluding part of the three part series dealing with security related issues faced when using popular social networking sites. This write-up deals with some of the settings and describes how and when these settings should be activated. While the suggested changes in the security settings may not guarantee that your personal information is not divulged to the unknown persons, it however, would act as a simple barrier to unwanted prying eyes.

Background
The previous two write ups briefly highlighted how social networking sites are a boon as well as a bane. Boon because they help you to reach out to your friends, contacts, etc. They also help you connect with like-minded people. However, what most people don’t realise is that, you may be parting with a lot of personal information, more than you bargained for and as a matter of fact, more that you even know or comprehend. It is a known fact that unscrupulous people can use this information for their own gains. It is a known fact, notwithstanding this, whenever disaster strikes, the people who are affected, more often than not, realise that they were sitting ducks.

Need for privacy
Social media sites, as we all know, permit us to meet /connect with other people on the net. Initially, we start off with close friends and relatives, whom we look up on facebook almost as soon as we open an account. It’s quite likely that they may have asked, you are you on Facebook?? Why aren’t you on Facebook??? You know….. giving you the feeling that everybody had boarded the bus to paradise and you were the only person left behind. So first of all you connect to them. Also you put in all the small–small personal details about yourself such as which school/college/ university, date of birth, locality where you stay/work, your chosen profession, likes & dislikes (yes that too), etc. All this information is careful and meticulously ‘harvested’ in humongous databases (read my write up on Big Data).

The next step in the process of ‘networking” is to ‘connect’ with like-minded people on Facebook. Suddenly, you will start getting prompts, suggesting that such and such person has a similar trait and therefore you may connect. What you don’t know is when you started punching in personal information, an intelligent algorithm was working behind the scene and putting all the pieces together. If not that, it was creating a ‘footprint’ for others to ‘find’ you.

While this seems convenient and intuitive to you, what most people don’t realise is that this very information can be used to ‘target’ you for something nefarious. It is in your interest that you don’t expose yourself to such risks. In order to do that you need to review your privacy settings and tweak them in a manner that permits you to connect with ease, but the same is protecting you from the villains lurking in the shadow.

Privacy settings
Activating or deactivating privacy settings can also be described as drawing a line (something like the proverbial Laxman rekha one might say), a line beyond which you want to keep intruders out. Conversely, one may say that you draw the line also to create a boundary beyond which your personal stuff doesn’t go. Mind you, just like in what has been said in Indian mythology, the villans will try every trick in the book to lure you, it is for you to realise what’s in your own interest.

Very briefly, the security setting (on Facebook) can be used to:

• Manage how you connect with others
• Select the audience with whom you want to share your personal stuff, and
• Manage how others connect with you (mainly photo tagging)

STEP 1: Manage how you connect with people

In order for you to manage, you first need to know:

• Where to find your privacy settings (a bit obvious, I know, but just in case you didn’t know) • Privacy shortcuts
• Controlling who can send you friend requests
• Changing the filter preferences for your messages
• Who can see your profile pictures (reminded me of a scene from Shah Rukh Khan Juhi Chawla starrer….where apro SRK says KKKKKKiran….)

So, first things first:

Where are my privacy settings?

To view and adjust your privacy settings:

1. Click in the upper-right corner of any Facebook page
2. Select Privacy Settings from the dropdown menu
3. Click on a setting (ex: Who can see your future posts?) to edit it, or use the left column to view your other settings

What are my privacy shortcuts?

Your privacy shortcuts give you quick access to some of the most widely used privacy settings and tools. Click at the top right of any Facebook page to see shortcuts that help you manage:

• Who can see my stuff?
• Who can contact me?
• How do I stop someone from bothering me?

This is also where you’ll find the latest privacy updates and other helpful tools. The shortcuts you find here may change over time to reflect the settings and tools that are most relevant.

Controlling who can send you friend requests

By default, anyone on Facebook can send you a friend request. If you’d like to change who can send you friend requests:

1. Click at the top of the page.
2. Click Who can contact me?
3. Choose an option from the dropdown menu below Who can send me friend requests?

Changing the filter preferences for your messages

You can change your filter preferences right from your inbox:
1. Go to your Other Inbox
2. Click Edit Preferences
3. Select Basic or Strict filtering
4. Click Save

Messages that are filtered out of your inbox will appear in your Other folder. If a message you’re not interested in gets delivered to your inbox, select Move to Other from the Actions menu. Keep in mind, anyone on Facebook can send you a message, and anyone can email you at your Facebook email address.

Who can see your profile pictures

When you add a new profile picture, here’s what happens:

• The photo is added to your timeline and appears in your Profile Pictures album.
• A thumbnail version of the photo is made and appears next to your name around Facebook. This helps friends identify your posts and comments on Facebook.
• Your current profile picture is public. You can change who can see likes or comments on the photo.

Step 2: Select the audience with whom you want to share your personal stuff

This includes:

• When I share something, how do I choose who can see it?
• How can I use lists to share to a specific group of people?
• Can I change the audience for something I share after I share it?
• How do I control who can see what’s on my timeline?
• What is my activity log?

When I share something, how do I choose who can see it?

You’ll find an audience selector tool most places you share status updates, photos and other stuff. Just click the tool and select who you want to share something with.

The tool remembers the audience you shared with the last time you posted something, and uses the same audience when you share again unless you change it. For example, if you choose Public for a post, your next post will also be Public unless you change the audience when you post. This one tool appears in multiple places, such as your privacy shortcuts and privacy settings. When you make a change to the audience selector tool in one place, the change up-dates the tool everywhere it appears.

The audience selector also appears alongside things you’ve already shared, so it’s clear who can see each post. If you want to change the audience of a post after you’ve shared it, just click the audience selector and select a new audience.

Bear in mind, when you post to another person’s timeline, that person controls what audience can view the post. Also that, anyone who gets tagged in a post may see it, along with their friends.

How can I use lists to share to a specific group of people?

Lists give you an optional way to share with a specific audience. When writing a post or sharing a photo or other content, use the audience selector to pick the list you want to share it with.

Can I change the audience for something I share after I share it?

Yes, you can use the audience selector to change who can see stuff you share on your timeline after you share it. Keep in mind, when you share some-thing on someone else’s timeline, they control the audience for the post.

How do I control who can see what’s on my timeline?

•    You can share basic information like your home-town or birthday when you edit your timeline. Click Update Info (under your cover photo) and then click the Edit button next to the box you want to edit. Use the audience selector next to each piece of information to choose who can see that info.

•    Anyone can see your public information, which includes your name, profile picture, cover photo, gender, username, user ID (account number), and networks.

•    Only you and your friends can post to your timeline. When you post something, you can control who sees it by using the audience selector. When other people post on your timeline, you can control who sees it by choosing the audience of the Who can see what others post on your timeline setting.

•    As you edit your info, you can control who sees what by using the audience selector.

•    Before photos, posts and app activities that you’re tagged in appear on your timeline, you can approve or dismiss them by turning on timeline review. Keep in mind, you can still be tagged, and the tagged content (ex: photo, post) is shared with the audience the person who posted it selected other places on Facebook (ex: News Feed and search).

•    Set an audience for who can see posts you’ve been tagged in on your timeline.

•    To see what your timeline looks like to other people, use the View As tool.

What is my activity log?

Your activity log is a tool that lets you review and manage what you share on Facebook. Only you can see your activity log.

Step 3: Manage how others connect with you— mainly photo tagging

This includes

•    How do I remove a tag from a photo or post I’m tagged in?
•    What is timeline review? How do I turn timeline review on?
•    How do I review tags that people add to my posts before they appear?
•    How do I control who sees posts and photos that I’m tagged in on my timeline?
•    How can I turn off tag suggestions for photos of me?

How do I remove a tag from a photo or post I’m tagged in?

Hover over the story, click and select Report/Remove Tag from the dropdown menu. You can then choose to remove the tag or ask the person who posted it to take it down.

You can also remove tags from multiple photos at once,

1.    Go to your activity log
2.    Click Photos in the left-hand column
3.    Select the photos you’d like to remove a tag from
4.    Click Report/Remove Tags at the top of the page
5.    Click Untag Photos to confirm

Remember, when you remove a tag, that tag will no longer appear on the post or photo, but that post or photo is still visible to the audience it’s shared with other places on Facebook, such as in News Feed and search.

What is timeline review? How do I turn timeline review on?

Posts you’re tagged in can appear in News Feed, search and other places on Facebook. Timeline review is part of your activity log and lets you choose whether these posts also appear on your timeline.

When people you’re not friends with tag you in a post, they automatically go to timeline review. If you would also like to review tags by friends, you can turn on timeline review for tags from anyone:

1.    Click at the top right of any Facebook page and select Account Settings

2.    In the left-hand column, click Timeline and Tagging

3.    Look for the setting Review posts friends tag you in before they appear on your timeline? and click Edit to the far right

4.    Select Enabled from the dropdown menu

How do I review tags that people add to my posts before they appear?

Tag review is an option that lets you approve or dismiss tags that people add to your posts. When you turn it on, then anytime someone tags a photo or post you made, that tag won’t appear until you approve it. To turn on tag review:

1.    Click at the top right of any Facebook page and select Account Settings

2.    In the left-hand column, click Timeline and Tagging

3.    Look for the setting Review tags friends add to your own posts on Facebook? and click Edit to the far right

4.    Select Enabled from the dropdown menu

When tag review is on, you’ll get a notification when you have a post to review. You can approve or ig-nore the tag request by going to the content itself.

Its important to highlight that when you approve a tag, the person tagged and their friends may see your post. If you don’t want your post to be visible to the friends of the person tagged, you can adjust this setting. Simply click on the audience selector next to the story, select Custom, and uncheck the Friends of those tagged and event guests box.

How do I control who sees posts and photos that I’m tagged in on my timeline?

To choose who can see posts you’ve been tagged in after they appear on your timeline:

1.    Click at the top right of any Facebook page and select Account Settings

2.    In the left-hand column, click Timeline and Tagging

3.    Look for the setting Who can see posts you’ve been tagged in on your timeline? and click Edit to the far right

4. Choose an audience from the dropdown menu

You can review photos and posts you’re tagged in before they appear on your timeline by turning on timeline review. Keep in mind, photos and posts you hide from your timeline are visible to the audience they’re shared with other places on Facebook, such as in News Feed and search.

How can I turn off tag suggestions for photos of me?

To choose who sees suggestions to tag you in photos:

1.    Click at the top right of any Facebook page and choose Account Settings

2.    Click Timeline and Tagging from the left-hand column

3.    Under the How can I manage tags people add and tagging suggestions? section, click Who sees tag suggestions when photos that look like you are uploaded?

4. Select your preference from the dropdown menu

When you turn off tag suggestions, Facebook won’t suggest that people tag you when photos look like you. The template that we created to enable the tag suggestions feature will also be deleted. Note that friends will still be able to tag photos of you.

Well, these were the basics.

If you want to learn more either visit http://www. facebook.com/help/privacy alternatively, you can do a google search and you will find several useful links to help you on this issue (not only for facebook).

Disclaimer: The purpose of this write up is to spread awareness, promote ethical and safe computing practices and share knowledge. This write up does not seek to discredit or malign any particular person, corporation or business in any manner what so ever.