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Financial Trading, Now at the Speed of Light
By siliconindia
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Wednesday, 09 November 2011, 01:43 IST
Although, there weren't any reports of regular investors losing money because of these events, it does show that these computer trading programs pose risk, and can cause damage because of the way they are structured. Even in India, BSE canceled all the futures traded on muhurath trading this year, as an initial report blamed an algo trader from Delhi for causing havoc because of their trades.
The actual volumes that can be attributed to algorithmic trading is never talked about and it's hard to say how big it is in either India or in the U.S., but the fact that no one wants to disclose it shows that it must be reasonably large.
HFT exists in good volume but what difference it makes on an individual trade is very low, it is capable of causing wildly large market movements and can change the course of the numbers any moment. It's become a technological arms race, and what separates winners and losers is how fast they can move.
