High-Frequency Trading: It's Worse Than You Thought : Is it, Really ?

High-frequency trading, which already has a sullied reputation, is even worse than the critics have charged, a new survey shows.

The Federal Reserve of Chicago recently asked 30 firms associated with the industry — traders, exchanges, vendors and others — to evaluate where HFT stands in the wake of a series of high-profile blowups.

While the central bank's analysts knew there were issues, what they found exceeded their expectations.

Industry pros reported a rash of out-of-control computer algorithms that power the HFT platforms. They admitted that speed is more important than safety. And they even went so far as to say that they actually wish the industry was more regulated but want the rules to be applied equally, something that may not be happening today.

To read the rest of this CNBC article Click On This Link

Congress Shines Spotlight on Speed Trading

Computerized speedtrading something back in the spotlight after a brief dip in the markets for crude oil on monday, is it time for a new regulation ? Direct Link Here

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Permalink Reply by Keith Shaw on September 21, 2012 at 2:39pm

Whistleblower : High Frequency Trading (HFT) is Predatory

Wall Street whistleblower Haim Bodek, former head of electronic volatility trading business at UBS, says high frequency trading is disruptive to markets. “It’s actually unbeatable without regulatory change. Direct Link Here

Permalink Reply by Lisa on September 21, 2012 at 2:49pm

That’s all we need ~ more *regulations* Duh

Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors

Permalink Reply by Keith Shaw on October 8, 2012 at 8:08am

High Frequency Trading (HFT) deeply concerns Erik Hunsader, founder of Nanex. He worries that today's investors, our regulators, -- heck, even the HFT algorithms themselves -- don't fully understand the risks market prices face in the brave new era of bot-dominated trading.

For instance, Hunsader estimates that HFT algorithms are responsible for 70%(!) of all completed transactions on our exchanges, and for 99.9%(!!!) of all exchange quotes.

A very interesting pod cast discussion on the subject of High Frequency Trading.

Permalink Reply by Rakesh Kumar on January 19, 2013 at 5:16am

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Permalink Reply by Keith Shaw on January 20, 2013 at 2:19pm

@Rakesh : Check out by previous blog post right here on FxStreet :

Three Market Idiots - Do YOU Recognise Them ?

Good luck with your predictions ;-)