ABC Radio National – Background Briefing
Attack of the algorithms
Robot Traders – High-Frequency Trading
There’s mounting concern in the world’s financial markets about the influence of High Frequency Trading.
This so called ‘robot trading’ was responsible for the Flash Crash of 2010 and in August this year, the US company, Knight Capital, lost $440 million when a trading algorithm ‘went rogue’.
Robot traders are dominating stock markets using high speed computer algorithms. Human traders and government regulators can’t keep up, and markets could be one programming glitch away from the next big crash. Stan Correy investigates.
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