The stock market has become a war between algorithm-based robots, a war for speed where the winners trade 10 microseconds faster than the losers. But all sides of this war have armed themselves so well, have reduced the timing of trades so much, that high frequency trading no longer makes much money.
|By: David Dayen Thursday October 18, 2012 9:45 am|
|By: David Dayen Monday October 8, 2012 3:32 pm|
One of the areas that Sen. Ted Kaufman and his chief of staff Jeff Connaughton tried to focus on during his accidental two-year term in the Senate was high-frequency trading. The 2010 “flash crash” showed the potential dangers of this fast-growing industry. Consider that our financial system places a large emphasis on where super-computers are sited relative to the trading machines.
As Felix Salmon points out, one of the consequences of the melting polar ice sheet is not just that companies want to drill for oil in the Arctic. They want to lay cable through the shorter Arctic route, to increase the speed of information between the US and Asia by a matter of 20-60 milliseconds. And that infinitesimal shaving off the time of a trade matters. It’s the difference between placing a trade too early and placing it too late. It means billions upon billions of dollars. And that’s a huge problem.
|By: David Dayen Thursday August 2, 2012 1:43 pm|
In another example of why normal Americans just shouldn’t play the casino that has become the stock market, a runaway trade bot threw the NYSE into turmoil yesterday.
|By: masaccio Thursday November 10, 2011 11:30 am|
Oligarchs hate that financial transactions tax, and they have senior administration officials in high places to protect their wealth from any tax, no matter how small.
|By: David Dayen Monday May 9, 2011 3:50 pm|
Sen. Charles Schumer, in addition to smack-talking John Boehner on the debt limit, came out with two policy ideas over the weekend, one abominable and one that has quite a bit of merit. See if you can guess which one got more attention.
|By: masaccio Wednesday October 6, 2010 8:40 am|
The SEC-CFTC report on the flash crash is out. Nothing to see here, just business as usual in the securities markets. Somehow that isn’t reassuring.
|By: masaccio Sunday August 8, 2010 10:30 am|
The market data analysis firm Nanex offers a convincing explanation of the Flash Crash of May 6, 2010. It identifies a troubling practice of computer trading that may be more serious than one crash.
|By: David Dayen Friday May 7, 2010 7:30 am|
I don’t want to say this was completely a technical glitch – even with that the market went down 350 points, mostly on European debt fears. But in a sense, what we saw yesterday does argue for stronger regulation of the financial sector. Too much trading is on auto-pilot, too much is invested in the sophistication of a computer program rather than the smooth flow of capital and judging the fundamentals of a company’s product. It’s like a casino populated by robots and automatic black jack machines. And as we saw, that has the potential to be dangerous.