INTRODUCTION What is flash trading? These days, flash trading, mostly called high-frequency trading (HFT), is in the middle of heated discussion about whether such practice is fair and legitimate. HFT is simply a form of automated trade execution with brisk decision-making process of the super computers. In common vernacular, professional HFT traders use super computers to trade stocks by attaining information faster than any others and using the information to make transactions, exploiting the price difference from the short instant. All of this can happen in franctions of a second. (Finger, 2013) This practice is viewed to be beyond the scope of human skills. HFT is one example of modern technological advances that exerts a great influence to the stock trading market. Some small and limited forms of algorithm trading with the use of mathematical and computerized formula for decision-making were being used by financial companies for decades. As time goes on, the size and scope of trading is expanding its area of business and is finding its way for public acceptance. In accordance to such expansion, the regulators and stock traders are expected to reconsider its potential consequences and prevent any manipulation or wrongdoings from occurring. Currently in the World However, HFT seems to be heading in favor of the opponents, as its danger and disadvantages are being emphasized through current issues. Interestingly, mostly negative perceptions seem to be prevailing as two noticeable events occurred: ‘Flash Crash’ in 2010 that resulted in significant decline of the stock price by about 10% (Patterson, 2010) and a new book Flash Boys launched by Michael Lewis. Even though it has been a tacit practice by investors or high-speed firms ... ... middle of paper ... ...bate is that everything is just conflicts between business. The high-frequency companies such as BATS exchange (CNBC) will be highly disappointed if more investigation is done on the issue to limit the activity. Moreover, some exchanges that have not acquired such fancy machines will be happy to have some limitations enforced on the invincible, high-tech rivals. A definite reality is that people show negative attitude toward flash trading, as shown in the survey question from CNBC. (CNBC.com staff, 2014) 66% responded that Katsuyama who casts doubt on the complete reception of HFT, while merely 5% voted for O’Brien who favors HFT and is actively carrying out business in that disputed industry. As the video from CNBC shows, this topic will be intriguing and intense topic for people and truly challenge people’s mind into good questions about the rationale behind HFT.
Flash Boys, by Michael Lewis, begins in a financial world that has been rehabilitated. Flash boys was really a great experience for me this term as Lewis pens down his thoughts and ideas on the highly lucrative and ethically untrustworthy business of high frequency trading. The new stock market, however, has replaced the human element with technological ability As per my research on Flash Boys it was interesting to find one to enlighten us with exposure on HFT. Getting ahead with HFT. It is a widely spread network secretly laid for about an 827-mile fiber optic cable connecting Chicago and Northern New Jersey in the straightest line possible.
The threat of online competitors is also present to every discount broker that has not switched to online trading or chooses to remain with their current business model and not offer online services. These online trading sites have unique trading capabilities that otherwise are not present at Edward Jones. They offer sound advice on stocks and other investments instantly. Each customer has to call their Edward Jones advisor in order to place a trade. This makes sense to Edward Jones because they want to help prevent the rash decisio...
Have you ever had the thought that technology is becoming so advanced that someday we might not be able to think for ourselves? There is no questioning the fact that we live in a society that is raging for the newest technology trends. We live in a society that craves technology so much that whenever a new piece of technology comes out, people go crazy to get their hands on it. The stories that will be analyzed are The Time Machine by H.G Wells and The Veldt by Ray Bradbury. These stories offer great insight into technologies’ advancements over time that will ultimately lead to the downfall of human beings. These two stories use a different interpretation of what will happen when technology advances, but when summed up a common theme appears. In the story, The Time
...is loophole in the ruling coincides with influential commercial and investment bank’s restriction of bets, as financial analysts state that it would remove liquidity from the industry. As mentioned earlier, when the regulations were implemented, the bankers were not making as much revenue with their investments as they had hoped, resulting in an increase in bank fees and also, thereby driving up costs of equities and bonds.
It has been said that every good thing must arrive at an end. On account of the Roaring Twenties that end came suddenly and startlingly. It is simple for one to think back upon the monetary circumstance that prompt the accident and disparagement the specialists for not seeing the indications of a potential calamity. Be that as it may, it was not all that simple for them to see such an accident coming. The 1920 's were a blasting decade and stock costs appeared to be at an unfaltering move for an apparently interminable ascent. Numerous elements can be ascribed to the reason for the accident however nobody element can be singled out as the lone reason. The real reasons for the share trading system accident of 1929
Technology, and the subsequent shift to program trading by computers, has been a major market shift. This has allowed trading volume to skyrocket. The Stock Market Crash of 1987, which saw the Dow plummet 507.99 points or, 22.61% on Oct. 19, 1987, was blamed on program trading that caused investors to rush for the exits in an extreme example of herd behavior. Currently, there has been speculation that flash traders, or investment shops that employ high frequency trading to buy and sell huge amounts of stocks, are creating unusually heavy market volatility (1).
The more we use and/or rely on computer technology, the more risky it gets. As Neil Postman has said, technology gives us something, it will take away something, I’d like to make a very small change to that and I declare that technology gives us a few things but take away many and the most fundamental things away. And I believe that the reason why no one really speaks about the disadvantages of computer technology is because the marketing of the products will certainly affect the product launching company. I hope one day we all realize where life’s taking us and try to find a resolution even though it may be a little late. But neither does trying not hurt nor a little outcome is better than
Stock exchanges worldwide are complex, seemingly sentient centers of trade. Many transactions are processed at such exchanges and millions of dollars can change hands in an instant. Due to the immense number of transactions, fraudulent practices and backroom deals can thrive if they function unchecked. One such practice is known as insider trading. Insider trading is the practice of buying or selling shares of stock with knowledge of how well the company will do not available to all stockholders. Most people in the stock exchange community regard insider trading as amoral, corrupt, and unethical because of the fear that the trading might hurt or weaken the stock exchange itself. The size of the stock markets makes most traders fear a crash and exempts the market from the economic laws that govern the rest of the business world. If a person were to buy a car or a home wouldn’t he or she shop around for the best deal and attempt to gather all the information about the product they were buying if they could. The same could be said for finding a low interest rate on a loan and the same should apply to stock exchanges.
information you will read about in this paper is what might become of the future.
On the other hand, there is the element of widespread profit from the market of the electronic currency. The ones who [participate...
“One of the very nice things about investing in the stock market is that you learn about all different aspects of the economy. It's your window into a very large world,” Ron Chernow once said. The stock market is undoubtedly an incredibly important economic feature, one that our modern world depends on. Indeed, the stock market is so integral to our life today that it can serve as a valuable tool where financial literacy is concerned. Two of the most important financial lessons that the stock market teaches are financial literacy terminology as well as a historical understanding of stock market institutions. The Stock Market Game simulation serves to teach these lessons in a secure environment, and
The efficient market hypothesis has been one of the main topics of academic finance research. The efficient market hypotheses also know as the joint hypothesis problem, asserts that financial markets lack solid hard information in making decisions. Efficient market hypothesis claims it is impossible to beat the market because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information . According to efficient market hypothesis stocks always trade at their fair value on stock exchanges, making it impossible for investors to either purchase undervalued stocks or sell stocks for inflated prices. As such, it should be impossible to outperform the overall market through expert stock selection or market timing, and that the only way an investor can possibly obtain higher returns is by purchasing riskier investments . In reality once cannot always achieve returns in excess of average market return on a risk-adjusted basis. They have been numerous arguments against the efficient market hypothesis. Some researches point out the fact financial theories are subjective, in other words they are ideas that try to explain how markets work and behave.
As global markets today's financial market increase in complexity, the tradition of learning by doing will not suffice. The financial manager today must hit the ground running with ready expertise to be used effectively as the CFO or as part of a team of financial experts within the ranks of the CFO's office. In navigating the international marketplace effectively, financial managers find themselves in a technology driven, real time information deluge which helps them to satiate the knowledge demands of investors, commercial and investment bankers, shareholders, employees, brokers, traders et al who must know particular companies, their products and the markets wherein they operate.
The Information revolution is changing our daily lives. With the rapid development of computer and internet, online commerce become quite common and plays an important role in the modern world. The online business has booming development in these few years. US online retail sales raised an average of 11% in the first three months of 2009 (“US Online Sales Up,” 2009). The growth of online sales may due to the growing number of consumers who shop online. In the case of Asia, survey reported 77.6% of Internet users have online shopping experiences in 2003 (as cited in To, Liao & Lin, 2007). Online shopping is very different from traditional shopping. Consumers cannot touch and check the product before purchasing it, which means they are at higher risk of fraud than traditional shopping. Consumers also have other concerns such as credit cards security of online shopping. Then questions should be raised: what is the advantage of online shopping? Why people shop online? In following paragraphs, the advantage of online shopping for the consumer and consumer’s motivation to shop online will be reviewed and discussed.
“When technology changes, things happen fast, people do things differently, laws are changed, and whole markets appear.” - Stuart Greenfield