Automated Trading Quotes

Over the years, the technology of trade has changed in response to advances in the ability to communicate. From its origins on the streets of Chicago, the Board of Trade moved to a building housing 'trading pits' for the open-outcry exchange by brokers representing buyers and sellers.

The financial world is at the cutting edge of high technology.

Electronic communications networks match trades between investors directly, without using a market maker or specialist as an intermediary.

As the financial experts all over the world use machines to unwind Gordian knots of financial arrangements so complex that only machines can make - 'derive' - and trade them, we have to wonder: Are we living in a bad sci-fi movie? Is the Matrix made of credit default swaps?

High-frequency traders are firms all around the world. They're massive investments. And there is an incredible race for speed now. People are paying hundreds of millions of dollars to shave milliseconds off.

Stock exchanges say that more than half of all trades are now executed by just a handful of high-frequency traders, who use rapid-fire computers to essentially force slower investors to give up profits, then disappear before anyone knows what happened.

High-frequency traders are firms all around the world. They're massive investments.

On the New York Stock Exchange, all buy and sell orders are routed through a single 'specialist,' guaranteeing that most small trades can be matched directly. But most larger trades are delivered to the specialist on the floor of the exchange by human brokers, a system that big investors view as increasingly inefficient.

All of a sudden the market is all about algos and routers.

We have already seen some instances of systemic risk in recent times in the Asian financial crisis. But what sparked off the Asian financial crisis? Automated trading programmes!

In financial services, the front end of the world operates at super-high speeds: comparative advantages are measured in fractions of nanoseconds. And yet back end processes - the amount of time you have to wait when you sell a stock before cash hits your account - can take days.

Some traders still think that a computer could not trade as well as they can.

When we had the 'flash crash' in 2010, where the price of some stocks briefly fell to zero, high-frequency trading played a big role in that event.