Must Read: How the Boom in High-Frequency Trading Has Changed the Markets

in Investing by

[dropcap]H[/dropcap]igh-frequency trading is the new normal — it now makes up the vast majority of trading in U.S. equities. While it’s come under scrutiny following the flash crash in May of 2010, the practice shouldn’t create any detrimental impact to long-term market fundamentals. In fact, it can even improve liquidity during calmer market environments. The downside, of course, is increased volatility in the short-term and investors will have to accept it. Interesting take from Bloomberg columnist and theoretical physicist Mark Buchanan. Give it a read.

 

With High-Speed Trading, the Market Cannot Hold: Mark Buchanan

Read the full article at Bloomberg News.

 

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