Tuesday, October 9, 2012

Should we allow computers to run the stock exchange?

http://www.cnbc.com/id/49333454

"A single mysterious computer program that placed orders — and then subsequently canceled them — made up 4 percent of all quote traffic in the U.S. stock market last week, according to the top tracker of high-frequency trading activity. The motive of the algorithm is still unclear.

The program placed orders in 25-millisecond bursts involving about 500 stocks, according to Nanex, a market data firm. The algorithm never executed a single trade, and it abruptly ended at about 10:30 a.m. ET Friday."

And they can't figure out who did this???  Is this how we want our economy run?  Computers deciding millions of trades every millisecond?  So it becomes a battle of the algorithms rather than competition based on the quality of product and management.  I don't like this.

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