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

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

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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