High-Frequency Trading Surges Across The Globe

From Reuters, here’s an interesting article on the spread of high-frequency trading:

Turf battles between exchanges also sometimes prevent the kind of interconnected market approach that provides fertile ground for high-frequency trading. Traditional brokers and institutions, whose positions are threatened by upstart trading houses, also help to erect barriers.
But the high-frequency wave, estimated to be responsible for about 60 percent of U.S. stock trading, has already washed over much of Europe and is being felt in some emerging markets, particularly in Latin America.
It is also making inroads in futures, options and foreign exchange.
In Brazilian stocks, there are signs that high-frequency trading is starting to get a grip, and some relatively small markets like Mexico and Colombia are encouraging major U.S. trading firms to bring in their latest rapid-fire trading techniques.
Smaller markets are attracted by the promise of more liquidity, which can make investing and trading cheaper and easier for everyone and help those who want to raise capital.
Concerns about algos gone wild setting off a market panic are secondary.
“It’s a virtuous circle. The more people come, the more other people want to come,” said Martin Piszel, head of alternative execution services at CIBC World Markets, the investment banking arm of Canadian Imperial Bank of Commerce .

Posted by on December 2nd, 2009 at 10:02 am


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