posted
Jun 3, 2010 by News Gatherer
But markets have been quiet about being hit by a tsunami. When it became clear that Greece has financial problems could lead to a European crisis of sovereign debt, the water began to beat. Worse was the "Flash crash May6, when the Dow lost 998points in minutes, only for the more than 600 events before closing almost 350points. While there are obstacles in the way, ranging from 6500-11205 is usually smooth and regular. The Dow lost 214points published on April27 and moved to three figures, 13 trading days next 17. On April 26, the Dow Jones stood at 11,205, almost 70 percent from its low in March 2009.
On May21, the VIX, which measures the volatility of the S & P 500 and is also known as the fear index, "25percent tip. The more volatile the market, the easier it is for them to earn money jumping in and out through stock exchanges. Through the exchange of large amounts of stock at a speed of up to one billion shares per day, high-frequency traders consumption of fractions of cents to time. Who is to blame? Many analysts have high fingers often traders, computer algorithms jockeys complex negotiations that are connected to computers and supermarkets to explore differences in prices. deleted most of the recovery that began in the spring of 2009, market volatility has returned.
Volatile markets when liquidity dries UPIN other words, when people can not trade stocks when they want, at a fair price. "In the days of large movements in the field of three digits, we do a lot of money.." "Operators are developing outside the high-frequency volatility, because when liquidity is low, it becomes very profitable to offer," said Manoj Narang, founder and CEO of Tradeworx, a hedge fund company and the high frequency negotiation in Red Bank, New Jersey, sells an average of 80 million shares on each day.
high-frequency operators, which together have kept a low profile, saying that due to hectic trading provides liquidity to help markets work better, improving the environment for all investors. Ted Kaufman (D-Dela.), probably the strongest criticism of the DC high-frequency trading, or FTD. Speed merchants report compress. However, politicians and regulators are beginning to get nervous. However, the combination of the speed with which they operate, the decision process of outsourcing of computer codes, and the almost total absence of regulation, and the shadow market for fuel and may exaggerate the volatility. "I fear we have sown the seeds of disaster to come," said Sen.
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