Many investors remember the "flash crash" in the United States stock market in March 2010. During this time the Dow Jones plummeted by 998 points. This crash was the result of high frequency trading. The fear is that this type of high speed trading may cause irreparable damage to the markets worldwide.
General Concerns Regarding High Frequency Trading
The main concern is how high stocks sentiment trading strategies will affect investors world wide. Most high frequency transactions are place within mille seconds. This high frequency trading accounts for over 65% of all stock trades. Many are concerned that high frequency trading strategies based on volume overlook other fundamentals. People once again feel that Wall Street is benefiting at the cost of individual investors. Of particular concern is how HFT strategies will impact long term investors in the stock market.
The SEC Major Concerns Regarding High Speed Trading.
Co-location is a major concern for the SEC. Co-location is the process where securities firms and traders place their file servers close to exchange trading centers. High frequency traders say this can shave milliseconds off the trading process. Many feel that co-location gives these firms an unfair advantage.
Many regulators have requested a ban on flash trading. The trading order is displayed for less that a second to a portion of the trading floor. This allows the trader to execute the trade with the very best pricing. Many believe this gives an unfair advantage to traders with the fastest computers.
General Concerns Regarding High Frequency Trading
The main concern is how high stocks sentiment trading strategies will affect investors world wide. Most high frequency transactions are place within mille seconds. This high frequency trading accounts for over 65% of all stock trades. Many are concerned that high frequency trading strategies based on volume overlook other fundamentals. People once again feel that Wall Street is benefiting at the cost of individual investors. Of particular concern is how HFT strategies will impact long term investors in the stock market.
The SEC Major Concerns Regarding High Speed Trading.
Co-location is a major concern for the SEC. Co-location is the process where securities firms and traders place their file servers close to exchange trading centers. High frequency traders say this can shave milliseconds off the trading process. Many feel that co-location gives these firms an unfair advantage.
Many regulators have requested a ban on flash trading. The trading order is displayed for less that a second to a portion of the trading floor. This allows the trader to execute the trade with the very best pricing. Many believe this gives an unfair advantage to traders with the fastest computers.
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