Algorithmic trading a top SEC worry

Global trend towards automation carries risk

Published: 1 Dec 2012 at 00.00
Newspaper section: Business

Securities regulators worldwide have voiced concern over a rapid increase in algorithmic trading volume, as it could further pressure local markets and prompt volatile trading in immediate response to market movements.

Vorapol Socatiyanurak, secretary-general of the Securities and Exchange Commission (SEC), told yesterday's annual meeting of Asia-Pacific market regulators that all are in agreement about the seriousness of algorithmic trading.

Also called automated or black-box trading, algorithmic trading is the use of an electronic platform to enter trading orders with algorithms deciding aspects such as timing, price and quantity of the order or in some cases initiating the order without human intervention.

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boons
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Discussion 1 : 02 Dec 2012 at 16.051
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It's a scam. When someone has advance non-public information a few days before a trade, we call it "insider trading" and the SEC rightly throws the participants in jail. When a trader executes a trade after receiving an order, but before executing the order, we call it "front running" and the SEC throws the trader in jail. But when a computer has advance non-public information a few microseconds before a trade, the SEC calls it "High frequency trading" and the participants make millions. It doesn't matter if it's milliseconds or days. It's still executing trades on non-public information ahead of client orders. It's obviously illegal.
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Algorithmic trading a top SEC worry | Bangkok Post: business