High-Frequency Trading Essay Example | Topics and Well Written Essays - 750 words

High-Frequency Trading - Essay Example It is the latest technological tool in the history of securities marketing. They assert the trading has lowered trading costs (Shorter and Miller 1-2). They, however, fail to realize that HFT leads to phantom liquidity, engages in manipulative strategies, have systematic risks, and that some HFT firms are involved in front-running. Although substantial evidence suggests that HFT provides market liquidity, it is not always the case. It at times fails to fulfill the liquidity-supplying function. The provision of liquidity by HFT is partially illusionary because it avails small order depth. This implies that HFT market makers usually quote narrow spreads without the will to sell or buy substantial quantities at the quoted prices. The low spreads, therefore, do not last and transacting significant quantities becomes impossible. In addition, it displaces other liquidity suppliers such as certified exchange specialists who are likely to endure in the market even during turbulent times. During the Flash Crash, for example, the sale of one large order caused HFT firms to gain substantial blocks of E-mini shares. As a result, many orders transacted at cheap prices and the index fell rapidly (Jones 1-3). Regulating HFT would, therefore, be important in order to caution liquidity when market conditions are not favorable. To remedy this problem, HFTs should run batch auctions at regular intervals. Under this regulation, exchanges can collect and aggregate available orders to trade securities. They would then be executed at the price when most offers and bids match (Shorter and Miller 34-36). There is a growing concern that HFT in front-running by damaging price discovery processes. In other words, there is growing worry that HFT provides unreliable price information and makes conditions difficult for traders equipped with sound information. It diminishes the market’s potential to

Research news to find stories uncovered by corporate media Paper

News to find stories uncovered by corporate media - Research Paper Example This paper describes the necessity to look deeper into the problems, which seem quite superficial from the first sight but in reality bear a substantial meaning.   Ã‚  Ã‚   Nowadays corporate media ignore some problems which are of paramount importance for the consideration of government. They concentrate their attention on the issues, which are solicited among the population. The widespread magazine articles, such as â€Å"How to lose a guy in 10 days† or â€Å"Life of celebrities† are read every day by the millions of people, without paying attention to the states of things, which take place in the surrounding world. However corporate media is oriented on the demand of the ordinary buyer, which is quite understandable. The regular reader does not want to be concerned about the entire issues, instead he wants to feel released and relaxed. My researches of the problems, ignored by the media of the USA resulted in the following articles: All articles were taken from the site called â€Å"Whowhatwhy†. The authors of the articles made a great success, because they discussed the topics, which were not revealed by means of American corporate media, considering them to be of no importance. However, reading these articles, we understand that such problems must not be ignored by the society. The articles cover the area of truth and society. I will start by the paper of Russ Baker â€Å"Classic Who: Should Pollard be Released?†. The case of Jonathan Pollard (a famous Israel spy) is still in the process of consideration. The thing is that after revealing Pollards connection with Israel authorities, he received a life sentence, which was approved by the court of the USA. However, the Israel members of the alliance were astonished for such a cruelty. They stated that the USA did not have enough evidence to blame Pollard for committing such a crime. The most interesting is that documents, revealed in the CIA appro ved such a possibility, which raised the question of