Colt's Hugh Cumberland hails the FIA report into high frequency trading.
2010’s infamous "flash crash", high frequency
trading (HFT) has been under the continuous gaze of the
financial services regulatory authorities. HFT's ability to
enable large numbers of high speed trades made it the prime
suspect when the Dow Jones Industrial Average plunged 1,000
points in a matter of minutes, before quickly recovering.
According to some market watchers, HFT increases volatility and
damages the integrity of the markets.
From firms being fined millions of dollars for computer errors
disrupting the futures market, to commodity traders getting
stung for market manipulation and alleged mini flash crashes
like the case of Thermo Fisher Scientific and Pall Corporation,
in which shares dropped by more than $1 before regaining most
of that value in minutes, the practice has come under
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