“We are just beginning to catch up to the reality of, ‘Hey, we are in an electronic market, what does that mean?’ ” said Adam Sussman, director of research at the Tabb Group, a markets specialist. Some academic studies show that high-frequency trading tends to reduce price volatility on normal trading days.Īnd while a recent analysis by The New York Times of price changes in the Standard & Poor’s 500-stock index over the past five decades showed that big price swings are more common than they used to be, analysts ascribe this to a variety of causes - including high-speed electronic trading but also high anxiety about the European crisis and the United States economy. The traders, he said, “are as much interested in improving the quality of markets as anyone else.” James Overdahl, an adviser to the firms’ trade group, said that they favor policing the market to stamp out manipulation and that they support efforts to improve market stability. The industry and others say that the vast majority of trading is legitimate and that its presence means many extra buyers and sellers in the markets, drastically reducing trading costs for ordinary investors. “The flash crash was a wake-up call for the market,” said Andrew Haldane, executive director of the Bank of England responsible for financial stability. Just last week, the broader market fell throughout Tuesday’s session before shooting up 4 percent in the last hour, raising questions on what was really behind it. Some regulators fear that the sudden market dive on May 6, 2010, when prices dropped by 700 points in minutes and recovered just as abruptly, was a warning of the potential problems to come. Perhaps regulators’ biggest worry is over the unknown dynamics of the computerized stock market world that the firms are part of - and the risk that at any moment it could spin out of control. In addition, officials in Europe, Canada and the United States are considering imposing fees aimed at limiting trading volume or paying for the cost of greater oversight. Regulators are also weighing new rules for high-speed trading, with an international regulatory body to make recommendations in coming weeks. In the United States and Europe, they have recently fined traders for using computers to gain advantage over slower investors by illegally manipulating prices, and they suspect other market abuse could be going on. They make a fortune whereas the public gets so whipsawed by this trading.”
“That is what caused this tremendous volatility. Wyser-Pratte, a prominent longtime Wall Street trader and investor. “There is something unholy about them,” said Guy P. The cost of these high-frequency traders, critics say, is the confidence of ordinary investors in the markets, and ultimately their belief in the fairness of the financial system. Regulators in the United States and overseas are cracking down on computerized high-speed trading that crowds today’s stock exchanges, worried that as it spreads around the globe it is making market swings worse.
0 kommentar(er)
