New Perspective: HFT Found Not Guilty by Foresight Working Paper
The UK Government's Foresight Project has released a working paper on computer-based trading (CBT), saying that there is no direct evidence that high-frequency trading (HFT) has led to an increase in market volatility.
It does, however, warn that feedback loops due to algorithmic trading can lead to significant market instability in certain circumstances, and that a normalization of large-scale deviance can result in catastrophic consequences.
The document, 'The Future Of Computer Trading In
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