Want to read Slashdot from your mobile device? Point it at m.slashdot.org and keep reading!


Forgot your password?
DEAL: For $25 - Add A Second Phone Number To Your Smartphone for life! Use promo code SLASHDOT25. Also, Slashdot's Facebook page has a chat bot now. Message it for stories and more. Check out the new SourceForge HTML5 internet speed test! ×

Submission + - High Freq. Traders Face Charges for Market Madness (reuters.com)

eldavojohn writes: "Occurrences like May 6 plunge are causing some to doubt high frequency traders. Today, the Chicago Mercantile Exchange announced an investigation into bad high frequency algorithms being employed in its own marketplaces. Infinium Capital Management is in the middle of a six month with regards to its "bad algorithm" that caused oil prices to jump. From Business Insider: 'Five seconds after the firm turned it on, they had to turn it off. The algo[rithm] "choked," after it had already flooded the oil market with orders that made up 4 percent of average daily trading volume in the contract, and caused a brief 1.3 percent jump in oil prices, from $76.60 to $77.60.' Two to three thousand orders per second caused 4,612 "buy limit" orders which were met with huge block trades minutes later at the offset position netting the company a cool $1.03 million LOSS. Imagine turning on your high frequency trader and five seconds later you're out one million dollars. If you haven't yet doubted the prudence or the extreme volatility of high frequency trading the forthcoming civil case might make the decision for you."
This discussion was created for logged-in users only, but now has been archived. No new comments can be posted.

High Freq. Traders Face Charges for Market Madness

Comments Filter:

Top Ten Things Overheard At The ANSI C Draft Committee Meetings: (5) All right, who's the wiseguy who stuck this trigraph stuff in here?