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[...] In the CDA markets, you are either a price-taker (market orders) or price-maker (limit orders). As a price-taker, you have to be conscious of liquidity available and be careful not to trade too large. Even the smallest of traders in the thinnest of markets can move prices to their detriment. You can be a price-maker to avoid all this, but then you have to hope you set your limit order at just the right price, or you have opportunity costs. If you don’t execute well, you lose. [...]
Part II (posted on Midas Oracle):
[...] The ideal market. An ideal dark market for CASTrader would be one that operated continuously, scaled well, and is general purpose like a CDA, while having the efficiency, volatility and trade encouraging characteristics of a call market, combined with the continuous liquidity and ability to function in thin markets of Hanson’s combinatorial market. To boot, I’d like it to be fair to traders of all sizes, as well as easy to program relative to a CDA. Is that possible? [...]
Part III (posted on his blog):
[...] Conclusion. There are some distinct disadvantages to this type of market to balance what appear to be substantial advantages. First, describing a continuous market order isn’t necessarily a human-friendly task. My own discretionary trading with the system will likely involve a learning curve. Second, typical trades will be broken up into many microtrades, which is a nightmare for anything but an automated accounting system. The cross-market solver will be a technical challenge to get working efficiently, but will at least be much more interesting to code than the order-matching algorithm of a CDA. Third, this is unknown territory, kind of like CASTrader, and that’s exactly why I’m choosing to adopt this new market design.
Amazing journey.
