The Growth of High-Frequency Trading: Implications for Financial Stability
نویسندگان
چکیده
the “Flash crash” of 6 may 2010 amplified the debate over the relative merits of HFt, which has preoccupied market participants and regulators for years . Since the advent of HFt, order-to-trade ratios and the volume of daily messages have increased dramatically: the toronto Stock exchange (tSX) order-to-trade ratio more than quadrupled between January 2005 and april 2011 (Chart 1) . this increase is evidence of the growing presence of HFt, which is characterized by a high volume of trade messages relative to the number of trades actually completed . these trade messages may not always represent genuine intent to trade, but are instead designed to obfuscate the price signal in markets in order to generate profitable
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