Regulator Puts a Spotlight on High-Frequency Trading

Scott Eells/Bloomberg

The Globe and Mail – By Boyd Erman – June 19, 2012

A market isn’t a market without confidence – and regulators know they have a real confidence problem on their hands because of high-frequency stock trading. Unfortunately, that’s about all they know.

The debate is nowhere near settled about the risks and benefits of the new breed of computerized trading that enables some traders to jump in and out of stocks in fractions of a second, thousands of times a day, in an attempt to capture tiny bits of profit that add up to big wins over time.

What is increasingly clear, however, is that it’s scaring some longer-term investors out of the stock market. The evidence is only anecdotal, but the refrain is common. From retail investors commenting on The Globe and Mail’s website to Tony Fell, who once ran the country’s biggest brokerage, the message is the same: The markets are seen as a casino where high-frequency traders are winning too often for it all to be just chance.

To read the full article please click here.

 

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