Thursday, September 20, 2012

High-Frequency Trading: It's Even Worse Than You Thought




From cnbc: 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.

The report came about as the Fed sought to uncover what happened in a series of well-publicized gaffes: …What it found was an amalgam of firms desperately trying to stay ahead of each other even at the expense of their own businesses…

Read all about it at http://www.cnbc.com/id/49102808

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