The New York Times: Don’t Ban the Trades; Regulate Them in Real Time

Posted on August 6, 2012. Filed under: Flash Crash, Technology, Practitioners, Exchanges, Regulations, Securities and Exchange Commission | Tags: The Speed Traders, High-Frequency Trading, Edgar Perez, Stuart Theakston, SEC, Hong Kong, algorithmic trading, McKinsey, Sao Paulo, Chicago, singapore, new york, High-Frequency Trading Book, automated trading, High-Frequency Trading Conference, Securities and Exchange Commission, Mary Schapiro, NYSE, GETCO, Goldman Sachs, Ultra High-Frequency Trading, Hedge Funds, Alternative Investments, Quantitative Trading, High-Frequency Trading Happy Hour, HFTLeadersForum.com, The Speed Traders Workshop, High-Frequency Trading Seminar, New York University, Seoul, South Korea, Options, The Speed Traders Workshop 2012, Kuala Lumpur, Malaysia, Kiev, Shanghai, Mexico, Moscow, The Speed Traders Workshop 2012 Sao Paulo, London, Polytechnic Institute, House Financial Services Committee, MIT Sloan, High Frequency Trading Networking, Market Abuse Unit, Pace University, How Traders Profit From High Speed Trading, The Malaysian Insider, HFT Seminar, HFT workshop, How Algorithmic and High Frequency Traders Leverage Profitable Strategies to Find Alpha in Equities, Futures and FX, trading strategy, high frequency trading speaker, Dark Pools, High-Frequency Trading Expert, The New York Times, Don’t Ban the Trades, Regulate Them in Real Time, Investing World, Knightmare on Wall Street, Facebook IPO, Knight Capital, End of Equities Investing, Weibo, Sal Arnuk, Joseph Saluzzi, Broken Markets, Dean Baker, Center for Economic and Policy Research, Neil Barsky, hedge fund manager, Ameritrade, Blackstone, Forbes, HFT Expert, High Frequency Trading Leaders Forum 2012, High-Frequency Finance, Jefferies Group, Knight Trading, New York Stock Exchange, Stephens Inc ., Stifel Nicolaus, Thomas Joyce |

In my latest piece in The New York Times, I argue that wrongdoing existed long before the advent of high-frequency trading, and it will always be a part of markets. High-frequency trading is simply a tool; it can be positive or negative for investors and markets. To maximize the benefit and minimize the downsides, regulators need to catch up with the technology.

High-frequency trading has been under a microscope since the infamous “flash crash” in 2010. Let’s remember, though: The market rebounded that day almost as fast as it fell, and regulators ultimately determined that the crash was initiated by human error. But many in the financial sector and in government were uncomfortable at the thought that high-frequency trading programs could vaporize huge amounts of equity in a matter of minutes.

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