Strategist Gayed to Moneynews: High-Frequency Trading May Cause Another Meltdown

Strategist Gayed to Moneynews: High-Frequency Trading May Cause Another Meltdown Read Latest Breaking News from Newsmax.com http://www.moneynews.com/StreetTalk/Michael-Gayed-High-Frequency-Trading-Meltdown-Market/2013/06/18/id/510439#ixzz2WaPiWSmv Urgent: Should Obamacare Be Repealed? Vote Here Now!

Last week’s news that Reuters sells early access to monthly consumer-confidence  data to customers who use the statistics in high-frequency trading points to the  danger of that trading, said Michael Gayed, chief investment strategist for  Pension Partners.

“For these high-frequency trading firms,” the  two-second advantage Reuters is giving to its customers is “a very negative  thing,” he told Newsmax TV in an exclusive interview.

“Speed can be much  more dangerous to markets than most people realize,” he said. “If you want to  get proof of that, take a look at May 6, 2010 — the Flash Crash, when you had,  effectively, all of these very high frequency trades bouncing off of each other,  ultimately creating a void in liquidity.”

Gayed also cited the brief plunge by stocks April 23, after someone hacked The  Associated Press’ Twitter account, posting a false report of a White House  bombing. “It was a simple tweet, and the market was collapsing in a period of  literally 20 seconds,” Gayed said.

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One Response to Strategist Gayed to Moneynews: High-Frequency Trading May Cause Another Meltdown

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