http://www.StockMarketFunding.com NYSE Listed Halts High Frequency Trading as Algorithms Runs Rampant. Where is the SEC? Breaking news, For NYSE listed stock trades only - MNGD may be having a routing issue. Use other routes for Listed stock orders for the time being. Wild swings in several stocks have the market abuzz this morning.
Initial signs pointed to a rogue trading algorithm, traders said, though the origins of the swings were unclear about an hour into Wednesday's session. NYSE Euronext said in a note to traders it was "reviewing trades in 148 symbols between 09:30:00 a.m. and 10:15:00 a.m. ET.
High-frequency trading (HFT) is the use of sophisticated technological tools to trade securities like stocks or options, and is typically characterized by several distinguishing features:
It is highly quantitative, employing computerized algorithms to analyze incoming market data and implement proprietary trading strategies;
An investment position is held only for very brief periods of time - from seconds to hours - and rapidly trades into and out of those positions, sometimes thousands or tens of thousands of times a day.
At the end of a trading day there is no net investment position; It is mostly employed by proprietary firms or on proprietary trading desks in larger, diversified firms; It is very sensitive to the processing speed of markets and of their own access to the market;
Many high-frequency traders provide liquidity and price discovery to the markets through market-making and arbitrage trading; high-frequency traders also take liquidity to manage risk or lock in profits.
Positions are taken in equities, options, futures, ETFs, currencies, and other financial instruments that can be traded electronically.
High-frequency traders compete on a basis of speed with other high-frequency traders, not long-term investors (who typically look for opportunities over a period of weeks, months, or years), and compete for very small, consistent profits.
As a result, high-frequency trading has been shown to have a potential Sharpe ratio (measure of reward per unit of risk) thousands of times higher than the traditional buy-and-hold strategies
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