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Controlling risk in a lightning-speed trading environment
Abstract: A handful of high-frequency trading firms accounted for an estimated 70 percent of overall trading volume on U.S. equities markets in 2009. One firm with such a computerized system traded over 2 billion shares in a single day in October 2008, amounting to over 10 percent of U.S. equities trading volume for the day. What are the advantages and disadvantages of this technology-dependent trading environment, and how are its risks controlled?
Keywords: Electronic trading of securities; Stock exchanges;
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Bibliographic Information
Provider: Federal Reserve Bank of Chicago
Part of Series: Chicago Fed Letter
Publication Date: 2010
Issue: Feb
Order Number: 272