High-frequency Trading–to Regulate or Not to Regulate-That is the Question?: Does Scientific Data Offer an Answer?
2013 (English)In: Journal of Business and Financial Affairs, ISSN 2167-0234, Vol. 2, no 1, 1-4 p.Article in journal, Editorial material (Refereed) Published
High-frequency trading (HFT) certainly captures public (and regulatory) attention. On May 6th 2010, the Dow Jones (DJ) experienced its largest intraday point drop in history, shedding $1 trillion of its market value in half an hour. Largely as a consequence of the event– named Flash Crash–regulatory authorities sharpened the regulations concerning HFT: in the U.S., circuit breakers were introduced , and the European Union made regulative changes that require equity orders to delay for at least half a second. Also, in the markets, there has been a demand for introducing a financial transactions tax (FTT) in order to discourage high frequency trading.
So, what is high-frequency trading? And why should it be regulated? And if it is regulated, how should that regulation be designed? In this editorial article, I will focus on existing scientific evidence on how HFT affects the market, and on the big questions about HFT that remain unanswered.
Place, publisher, year, edition, pages
Westlake, CA: OMICS Group , 2013. Vol. 2, no 1, 1-4 p.
high-frequency trading, financial markets, systematic risk
IdentifiersURN: urn:nbn:se:su:diva-87602OAI: oai:DiVA.org:su-87602DiVA: diva2:604827