High-frequency flops

High-frequency flops

Recent flash crashes on the Indian and overseas bourses tend to indicate that technology-enabled speed-trading on the bourses, at times, is no boon.

There are instances of exchanges annulling trades and in some cases not doing so, after investigation.

While the frequency of these momentary lapses, triggered either by man or technology is not too alarming, the fact remains that such errors cause losses.

Last week, Reserve Bank of India, in its financial stability report, said a proper regulatory structure and continuous monitoring of regulatory systems would avert operational and other risks posed by algorithmic trading (Algo) and high frequency trading (HFT).

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