Arab Today, arab today highfrequency stock trade risky unfair
Last Updated : GMT 21:47:41
Arab Today, arab today
Arab Today, arab today

High-frequency stock trade risky, unfair

Arab Today, arab today

Arab Today, arab today High-frequency stock trade risky, unfair

Washington - AFP

The increasing power of computerized high-frequency trades on US markets has been assailed in Congress as dangerous and unfair, as pressure builds to reel in the powerful industry. Brokers and industry experts told a congressional panel Thursday that the flash crash of May 6, 2010, the computer glitch that sabotaged Facebook's IPO last May, and the Knight Capital software problem that dealt the company a $440 million loss in August, were all examples of the potential for disaster from ultra high-speed, high-frequency trading (HFY). "US equity markets are in dire straits. We are truly in a crisis," said David Lauer, a former trader and currently a consultant on markets and high frequency trading at Better Markets Inc. "While complex systems can often provide elegant solutions to intractable real-world problems, they can also spin out of control in unexpected ways," he told the Senate Committee on Banking. High-frequency trading now accounts for 50-70 percent of the volume on markets each day. It has turned most share purchases into acts lasting a second or less, rather than investments that can span days, months and years. But it simultaneously works in "dark pool" trading operations away from regulated markets, with computers able to work at hyper-speed to exploit price anomalies and take advantage of buyers and sellers trading in traditional ways.Lauer cited the flash crash of May 2010, when in just minutes the market plunged, losing $1 trillion in value, then just as quickly recovered. In the interim, though, he said, all liquidity in the market "simply disappeared" as computerized traders pulled out. "Nobody had ever seen anything like it... When more than half of the liquidity in the stock market is able to be pulled from it in a matter of seconds, dramatically worsening an unstable situation, something is dreadfully wrong." Lauer said the problem is far more common than the most publicized incidents suggest. "'Mini flash crashes' occur on a near-daily basis in individual stocks," he said. The effect is that traditional retail investors have pulled out, frightened by the volatility brought by HFT and the perception of unfair pricing. "The flight of the retail investor during a period of incredible stock market returns is a sure sign that this exodus is a result of mistrust rather than economic conditions." Andrew Brooks of brokerage T. Rowe Price told senators "the almost myopic quest for speed has threatened the very market itself." "There is a growing distrust of the casino-like environment that the marketplace has developed over the past decade. We worry that the erosion of investor confidence can undermine our capital markets, which are so important to the economy." He said the existence of 13 different exchanges and over 50 dark pools that large traders can use, and obtain faster information on prices than others, "has produced a market that values speed over fair access." "In no other regulated industry is one party allowed a head start in exchange for payment." Larry Tabb, chief executive of market consultant the Tabb group, said its poll of market professionals shows that the flash crash and Knight problem have driven confidence in the markets sharply lower. But he cautioned against over-regulating. "I am not sure that there is a direct correlation between this drop in confidence and the long-term trend of decreasing equity ownership," he told the Senate panel.  "We need to be careful not to over-regulate our markets. The unintended consequences may be tremendous. That said, liability and responsibility are important to the marketplace and should not be vacated."

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today highfrequency stock trade risky unfair Arab Today, arab today highfrequency stock trade risky unfair

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today highfrequency stock trade risky unfair Arab Today, arab today highfrequency stock trade risky unfair

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today Taxi! Transport gets an overhaul

GMT 12:09 2017 Sunday ,24 September

Taxi! Transport gets an overhaul
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Turkey warns of 'security' steps

GMT 12:17 2017 Sunday ,24 September

Turkey warns of 'security' steps
Arab Today, arab today North Korea 'more opaque'

GMT 10:50 2017 Sunday ,24 September

North Korea 'more opaque'
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Ministry seeks to improve education

GMT 14:49 2017 Sunday ,17 September

Ministry seeks to improve education
Arab Today, arab today 'Lady Beast' fights for girl gamers

GMT 10:27 2017 Sunday ,24 September

'Lady Beast' fights for girl gamers
Arab Today, arab today Psychologists help Mexico deal

GMT 05:05 2017 Sunday ,24 September

Psychologists help Mexico deal
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Third generation adds more power

GMT 13:40 2017 Sunday ,24 September

Third generation adds more power
Arab Today, arab today Carmakers face billions in European

GMT 12:37 2017 Saturday ,23 September

Carmakers face billions in European
Arab Today, arab today Lebleba is preoccupied in filming 'Back Street'

GMT 08:56 2017 Thursday ,21 September

Lebleba is preoccupied in filming 'Back Street'
Arab Today, arab today Big Western brands polluting oceans

GMT 20:10 2017 Saturday ,23 September

Big Western brands polluting oceans

GMT 08:59 2017 Wednesday ,20 September

Youssra prepares for launching her program

GMT 10:16 2017 Friday ,22 September

All eyes on May as she prepares

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 12:01 2017 Wednesday ,20 September

Puerto Rico, Virgin Islands brace

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 18:11 2017 Saturday ,23 September

Doctor provides advices to families

GMT 13:36 2017 Saturday ,23 September

unveils Joon - the 'millenials' airline

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 12:46 2017 Thursday ,21 September

Google likely to buy stake in Taiwan smartphone maker HTC

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday