For Some, High Frequency Trading Breeds Unfairness

20100127084812clinical-data-operation-landing-430x3236The stock market is rigged to help the rich and powerful who have access to high frequency trading algorithms– and regulators are doing little to help individual investors. The only way to avoid this hazard is not to trade a lot.

The traditional model of the stock market is one where rational investors aim for long-term profit by carefully assessing equities based on publicly available information. That model is no longer valid. In fact, the majority of trades are made in the matter of nanoseconds by supercomputers with no human input at all.

High-frequency trading (HFT) is out of control. The TABB Group estimates that HFT accounts for 73% of all trades on American stock exchanges.

HFT gives an unfair advantage to those with the means to use it, creates volatility, distorts stock prices and loosens the relationship between how well a company is managed and the price of its stock.

Read More 

Advertisements
This entry was posted in Business, Finance, High Frequency Trading, high-frequency journalism, SEC, The Wall Street Journal, U.S. Economy, Useful Links, Wall Street and tagged , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s