Get Ready for Hypertrophic Cardiomyopathy when you Learn what Alex Frino, Professor at University of Sydney Business School, thinks about High Frequency Trading and Volatility

Alex Frino, a professor at University of Sydney Business School and CEO of Capital Markets Co-operative Research Centre, says that high frequency trading reduces volatility in stock markets rather than exacerbates it. With his experience working with many global exchange companies some of which includes Nasdaq, Euronext Paris, and the London Stock Exchange, he experienced no increase n high frequency trading and price volatility in equity markets.

He states that if there is an exacerbated volatility in the market there will be a positive relationship between an increase in high frequency trading and in price volatility. High frequency trading has a bad rep ever since the recent August market sell-offs that recorded the worst percentage loss since 1998. But Frino says that blaming high frequency trading for market volatility is just an opinion rather than fact.

Professor Frino, an expert in high frequency trading states that high frequency trading recognizes when prices are abnormally high or low and their response is base prices that occur based on the market and the main goal is to push it back to equilibrium. But many analyst states that high frequency trading leads to more correlations than results. The difficulty in diversifying the index tracking and  the flood that it creates in the market causes a flaw in high frequency trading.

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