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Financial Trading, Now at the Speed of Light
By siliconindia
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Wednesday, 09 November 2011, 01:42 IST
"Automated trades over the direct market access platform are 10 times more cost-effective than what third party brokers like us would charge," T.S. Harihar, co-head of institutional derivatives at ICICI Securities, said in an interview. "Third-party brokers have been forced to reduce commissions to stay competitive," as quoted by Bloomberg.
But high frequency trading is not a win-win situation every time. In May 2010, a flash crash took place in the Dow in which several companies and blue chips lost a lot of their value in a matter of minutes, and the NYT reported that shares of big companies like P&G and Accenture saw ridiculous prices like a penny or a $100,000. The prices were later restored to more usual levels.
