Sunday, May 19, 2013

High Frequency trading - The Equedia Letter By: Ivan Lo

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Here is an animated picture by Nanex that shows the growth of HFT:
(refresh page to start from beginning of animation)
High Frequency trading is a legal way to hack the stock market. Not only do these programs already make the majority of trades in the stock market, but their use is growing and they’re constantly evolving. Due to the inability to monitor and regulate the use of HFT, many risks exist. As long as that risk exists, hackers, thieves, and terrorists can gain control of our market and steal billions of dollars from our pockets.
HFTs are not only being used in the U.S., but everywhere around the world, including Canada. Sadly, regulations in Canada only add more support to the destruction of our market. An example of this is the “downtick rule,” which I’ll explain more about next week.

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