According Fierce Finance IT’s Jim Kim, There has been no shortage of academic and government research work when it comes to high-frequency trading.
A recent study by a top government economist found that the benefits of such trading are dubious and perhaps detrimental to individual investors. On the other hand, a large-scale meta-study by British researchers, which some tout as the most comprehensive analysis yet of the practice, concluded that many of the alleged harms are overblown.
The study “largely rejected some of the most troubling accusations that have been made about the firms that practice high speed trading, or H.F.T., including charges that they have caused greater volatility in markets and manipulated stock prices.”
Is there room for yet more research on this? Apparently there is.
According to a forthcoming study by Mao Ye, a professor of finance at the University of Illinois, the arms race in speed generates “extreme views about high-frequency trading, but if you look at high-frequency trading scientifically, you would see that’s it’s neither good nor evil,” as quoted by PHYS.org.