Practical analysis for investment professionals

High Frequency Trading (HFT)

What to Do about High-Frequency Trading

Like powerful tools or drugs, high-frequency trading (HFT) is both extraordinarily valuable and incredibly dangerous. Although HFT greatly reduces average trading costs for investors, it also poses systemic risks to the markets, hurts investors through front running, and decreases investor confidence.

Financial Innovation: Helpful or Harmful to Markets?

The legacy of financial innovation was the subject of a recent panel discussion, where three leading practitioners assessed some of the most widely debated innovations of our time, including high-frequency trading, dark pools trading venues, and the Dutch auction model for initial public offerings.

Book Review: Broken Markets

The authors point out some troubling aspects of the US stock market resulting from its radical transformation over the past 15 years, culminating in the Flash Crash and the unintended consequences of reforms meant to increase market competition. They propose a few very specific rule changes as remedies.

Poll: Are High-Frequency Trading Reforms Needed?

In a poll conducted earlier this week, CFA Institute asked its members if tighter regulation of high-frequency trading would meaningfully reduce technical glitches in the stock market. Not surprisingly, nearly two-thirds of respondents thought that tighter regulations would indeed be effective.

Take 15: Trends in Algorithmic Trading and Developments in Asia

Giorgio Valente, professor of finance at Essex Business School and founder and director of the Centre for Asian Financial Studies at the University of Essex, discusses recent trends in algorithmic and high frequency trading and related developments in the Asia Pacific region.

Take 15: High-Frequency Trading, Flow Toxicity, and the Flash Crash

At the Asian Finance Association Conference in Macao SAR, China, Dr. Maureen O’Hara, an expert in market microstructure and trading, discusses high-frequency markets, algorithmic trading, flow toxicity, and differential access to price information in Asia, as well as the flash crash and market fragmentation.

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