Germany to tap brakes on high-speed trading
October 29, 2012
High Frequency Trading chart (credit: Nanex)
Germany is set to advance a bill Wednesday imposing a spate of new rules on high-frequency trading, escalating Europe’s sweeping response to concerns that speedy traders have brought instability to the markets.
The measure seeks to require traders to register with Germany’s Federal Financial Supervisory Authority, collect fees from those who use high-speed trading systems excessively, and force stock markets to install circuit breakers that can interrupt trading if a problem is detected, The Wall Street Journal reports.
Comments (11)
by peter g
germany always leads by example
by Rick
It is a start and it will be interesting to see if it has an effect on the market performance. Wat is needed is a way to control the bid/ask as well as intercepting orders. Market makers are now alog’s as well so we need to have delays as well to permit actual human’s to interact real time including internet delays. At least 5 seconds might be enough between each transaction.
by Rick
One problem in the Us though is that large firms have literally paid billions for real estate and high speed servers in close proximity to the exchange to cut down on all wire delays. These guys are not going to be willing to give that up and they are in firm control of Congress. This is why naked shorts and the uplift tick rules STILL haven’t been changed. Co
by sam
I think you don’t get, it’s not a fee/transaction which is needed to slow down HFT, it’s a fee for each order sent to the exchange. You can have 100k orders sent for a single transaction (quotes flooding).
by Dennis R.
I don’t know if a small fee per transaction would be a deterrent given the volume of shares being traded. Perhaps a fee per share per each transaction would lessen the speculative/manipulative trading.
by Bennie Beaver
Computer stock trading is just another way to concentrate power at the top…liquidity be damned. Wouldn’t you like to make money at home while you sleep on the sofa? Whether algorithmic trading survives far into the future will truly depend on clearly understanding its relationship to equal opportunities and the common man. Is it fair? How do we insure equal opportunities and power…Is it possible? Was Thomas Jefferson correct in believing that even our democratic republic would require regular revolution to reset balanced government. That also is one reason Jefferson said we would need to tax extreme wealth in order to raise indigence to a higher level of comfort. Capitalism is boom and bust…reset!
It’s a complex issue, and how we solve it will determine whether our republic comes close to surviving as long as the Roman empire.
by Gabor
What if we implemented, say a 5 seconds delay to ALL electronic (auto) trades?!
by Dave F.
High speed trading is a scam. All you need is a small fee per transaction and that will end it.
by Sara Peterson
I’m a fan of singularity too but I believe that recruiting all of those wonderfully bright math guys to build algorithyms for trading instead of working on theory is fundamentally wrong. Transparency to trading is the key not dark pools and math.
by gaoptimize
A start, but not good enough. Make offers and bids open and visible for at least 1 minute (give humans a chance). Don’t let the computers put phony offers out there for a few milliseconds just to ramp the price. Charge a penny per transaction. That will shut this scam down.
by Gorden Russell
But when traders start getting DNA computers with organic memristors in their brains, will their constitutions allow such regulation of the individual?