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Feature: Unfair advantage or competitive edge?
27 August 2010
High frequency trading has come under fire from politicians and sections of the financial world, accused of creating market volatility. Those involved in the practice have come out fighting, however, saying they are being unfairly targeted
Credit default swaps and sub-prime mortgages have all been blamed for the collapse of the financial markets, some with greater justification than others, and as time has passed the net has grown wider with more and more areas under the financial services umbrella coming under scrutiny.
High frequency trading (HFT) is one of the investment strategies swept up in an ever quickening avalanche of regulatory and public investigation due in part to its increasingly impressive returns and rapid rise in market share.
Just a few years ago HFT wasn’t on anybody’s lips, yet now, largely because of a very profitable 2008, it has risen to prominence. When many individuals and institutions were losing large sums, those using the strategy were faring well.
Another factor which shot HFT into the headlines was the arrest of Sergey Aleynikov, a computer programmer for Goldman Sachs who was charged with stealing...
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