There will be a lot of press in the coming days about High Frequency Trading (HFT)
There will be a lot of press in the coming days about High Frequency Trading (HFT). This is effectively computer driven trading at ultra high speeds. It is widely considered a scourge on equity markets, creating false liquidity and cheating genuine investors. The fuss has erupted over a 60 minutes report in the US. The report tells the story of an RBC trader who noticed that his trades were being detected before they were filled and in most cases the market would move up - increasing the cost of his order and impacting performance for clients. The report follows his investigation involving a fibre optic cable specialist, maps of the major US exchanges, the biggest names in US funds management and ultimately results in the establishment of a new HFT proof exchange. Needless to say, these events have ruffled some feathers. Here is the link to the report
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