Recent Thoughts on High Frequency Trading

In 2010, the DOW Jones industrial average took a sharp dive in what is referred to as the “flash crash”.  In a matter of minutes, the DOW Jones dropped by about 600 points. High Frequency Trading seems to be one problem that exacerbated the sudden price swings. But what is High Frequency Trading? As pointed out in Jonathan A. Brogaard’s paper, it doesn’t exactly have one: “Even the Securities and Exchange recognizes this and says that high frequency trading ‘does not have a settled definition and may encompass a variety of strategies in addition to passive market making’”. Essentially, though, it Continue reading Recent Thoughts on High Frequency Trading