Is High Frequency Trading Adding to Stock Woes?
abcnews.go.com
Some experts say that of computer driven high frequency trading is partially responsible for accelerating the market up and down
By MICHAEL ONO, ABC News
Aug. 11, 2011
This week's market flux is not identical to the flash crash of 2010 but experts believe that computer-driven high frequency trading is partially responsible for accelerating stock gyrations.
It has been a rollercoaster week for stocks. The Dow Jones industrial average fell by 600 points on Monday in reaction to U.S. debt downgrade by Standard & Poor's, then jumped 429 points on news from the Federal Reserve on Tuesday, but dove back down 520 points on Wednesday in reaction to bank stock worries in France.
My comment...
Nearly three quarters of all stock market trades are done by high-speed computers running programmed trading algorithms, taking advantage of tiny stock mispricings. Round-trip trades (buy+sell) often take less than a second. Market swings are amplified enormously.
TheNewGildedAge.blogspot.com This blog focuses on the growing inequality of income and wealth in the U.S. As Warren Buffett said in 2008: “There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning.”
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