A sharp price move coupled with high volume often prompts speculation about the
influence of high frequency trading, when computer algorithms are used to trade stocks at an extremely rapid pace.
I would recommend anyone interested in the
subject of high frequency trading check out Scott Patterson's Dark Pools which provides a more comprehensive history of how it is we got here.
Even those who can somehow manage to outperform the collective wisdom of markets can rarely continue to do so, especially after accounting for the taxes and
expenses of the higher frequency trading involved with active management.
Flash Boys is about the
world of High Frequency Trading (HFT), and the «edge» that some traders have been able to achieve by using very fast computers to «see» market data ahead of their competitors.
While there are circuit breakers in place in the event of a quick and massive sell off, there still is a lack of new regulations in place to police the
practices of high frequency trading firms.
Sure, you could say that the pragmatism behind that belief is a little off, but I am convinced that there is too much money involved in the
game of high frequency trading to see its growth slow down or taper off now.
As it stands now, high frequency trading is largely unregulated and unless Congress passes sweeping legislation, which is unlikely to happen given its performance during past opportunities to enact regulation upon the stock market or financial dealings, there is nothing impeding the
growth of high frequency trading.
An array of works also explore the
phenomenon of High Frequency Trading, described by the artist as «one of the most opaque, automated and sped - up processes of the present moment».