High frequency trading

[Robert Slade <rmslade () shaw ca>]

I've grown increasingly interested in the concept, and potential risks to the economy as a whole, of high frequency (or 
high speed) trading.  This is the second article I've seen on it recently:

"High-frequency trading now accounts for 60 percent of total U.S. equity volume, and is spreading overseas and into 
other markets. Yet critics worry fast trading may undermine the integrity of the U.S. equity market and could even 
spark another financial crisis. They question the amount of money high-speed traders make, 
especially after holding a stock for only a few seconds. They wonder what purpose such quick turnover serves. The 
market “is not trading on fundamentals anymore. It "

”But high-frequency traders point to last year’s steep sell-off as proof of their value in helping the market run 
smoothly.  While over-the-counter and other markets seized up, exacerbating the worst financial crisis since the Great 
Depression, fast traders continued to buy and sell shares."
  
"Critics fear an errant computer code, similar to the program trading behind the Black Monday crash of 1987, could 
engender another deep market plunge. With worries over systemic risk growing, the U.S. Securities and Exchange 
Commission has jumped into the fray. It has proposed a ban on so-called flash orders and wants to crack down on the 
scores of anonymous trading venues known as dark pools. The regulator plans to issue a report early next year that 
officials said would focus on whether markets reliant on high-frequency trading are more or less efficient for 
long-term investors, including those trading small- and mid-cap stocks."

http://uk.reuters.com/article/idUKN173583920091202?pageNumber=1 
  

====================== 
rslade () computercrime org  slade () victoria tc ca  rslade () vcn bc ca
"If you do buy a computer, don't turn it on."     - Richards' 2nd Law
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