High frequency trading attracts a lot of press because of the unusual hardware needs.
When it comes to high frequency trading, the rack is the computer, Mehta said.
High frequency trading has been a highly contentious introduction to the market in the last decade.
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Many other traders, including those representing the much vilified high frequency trading crowd, support the same argument.
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High frequency trading (HFT) is based on proprietary computer models that buy and sell securities without human intervention.
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High frequency trading, oil and gas modeling, pharmaceutical research and engineering often make great demands on their computing environments.
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The flash crash was not high frequency trading, it was high velocity trading.
Meanwhile I have a beef with the politicos whining about high frequency trading.
Will a transaction tax put a crimp in high frequency trading shadow-like activities?
High frequency trading has been scrutinized in recent years because of its links to financial scares like the Flash Crash.
That is especially important in automated high frequency trading (HFT) where a flawed model can lead to immediate losses, as MathWorks says.
For investment banks, the data centers can provide co-location of their algo engines next to exchanges to reduce latency in high frequency trading.
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The Chicago Board Options Exchange has chosen technology from Solarflare and Arista on 10 Gigabit Ethernet for high frequency trading across CBOE Holdings.
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Jeremy Grant, who covers exchanges for the Financial Times, said that in racing after high frequency trading the utility functions of exchanges may be lost.
He found traders and analysts who worried that a tax on high frequency trading could damage the industry, including Larry Tabb of the Tabb Group.
It would be akin to the problem with High Frequency Trading.
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But the actual algorithms used to power much of high frequency trading are not well understood, and locked up in hedge funds and large financial firms.
In my opinion, since 1989, the SEC has largely abandoned the meaningful oversight of systemic risk to the markets from high frequency trading, algorithms, and the like.
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As latency has been driven into the microsecond range for high frequency trading (HFT), firms are looking for either new geographies or new information to supplement market data.
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The SEC wants to ban certain activities involving high frequency trading firms, including certain types of trading orders and certain ways they can access NYSE and other market centers.
Some of the market inefficiencies have been created from ETFs, of which widespread use has created high correlations among stocks, and high frequency trading, which is not based on underlying fundamentals.
Matin then contacted his college friend Mahmoud and convinced him to leave his job on Wall Street, where he was building high frequency trading systems, to join the company as well.
By comparison, in high frequency trading, they want speed first and they are willing to live with whatever the power draw is in that co-location center if it gives them an edge.
Two legendary fund managers, Marvin Schwartz of Neuberger Berman and Leon Cooperman of Omega Advisors both told CNBC on Thursday that the high frequency trading programs are the cause of the crazy volatility.
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The incident will certainly ratchet up the pressure to rein in the increasingly influential high frequency trading firms, which have taken over more than half the daily trading volume in the U.S. stock markets.
What the May 6 crash did show was that while high frequency trading may work just fine in normal market conditions, when trouble comes the markets become a mile wide and an inch deep.
When Gilani and I sat down a few weeks ago to discuss the current state of the markets, it was an interesting back and forth about the inroads of high frequency trading and algorithms.
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Instead, I believe that it is a product of high frequency trading and as more traders adopt HFT we will see more firms crashing as they did and see more flash crashes as well.
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The Securities and Exchange Commission has been studying a number of proposals that would put an extra burden on firms engaged in high frequency trading strategies or on firms assisting other firms with high frequency trading.
The SEC still has to deal with all sorts of other issues, mostly to do with high frequency trading and its effects on the markets, along with all the issues it has to tackle with financial reform.
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