Feature

The upside of high-speed trading

Think of the market as a school of fish, pooling its resources to enable “all the fish to react quickly to any threat.”

Mark BuchananBloombergView.com

Is high-speed trading really all bad? asked Mark Buchanan. There’s no doubt that “timely information is precious,” and today’s technology allows traders and investors to “process news so quickly that they can move stock prices before exchanges even have time to calculate them.” That can cause all sorts of problems, but high-octane trading “also has its benefits.” For one, the rapid execution of trades can help synchronize prices faster, which should “be comforting news for average investors who act over much slower times and don’t have vast resources to gather and process information.” If markets don’t keep up with the speed of technology, “stock prices won’t reflect the available information, and regular investors will run a larger risk of buying or selling at the wrong price.” The high-frequency traders reap more rewards, but they simultaneously “end up helping ordinary investors make better decisions more quickly.” The truth is, speed and accuracy aren’t mutually exclusive. Instead, think of the market as a school of fish, pooling its resources to enable “all the fish to react quickly to any threat.”

Recommended

Germany imposes new restrictions on unvaccinated
Angela Merkel.
'a very, very difficult situation'

Germany imposes new restrictions on unvaccinated

Olympic committee: 2nd call with Peng Shuai 'reconfirmed' she 'appeared to be safe'
Shuai Peng
'difficult situation'

Olympic committee: 2nd call with Peng Shuai 'reconfirmed' she 'appeared to be safe'

10 things you need to know today: December 1, 2021
A vigil for Oxford High School shooting victims
Daily briefing

10 things you need to know today: December 1, 2021

Honduras ruling party concedes to leftist Xiomara Castro in presidential election
Xiomara Castro
Señora Presidente

Honduras ruling party concedes to leftist Xiomara Castro in presidential election

Most Popular

Police reportedly seize hard drives from Marilyn Manson's home
Marilyn Manson
raid

Police reportedly seize hard drives from Marilyn Manson's home

Tiger Woods opens up about 'tough' recovery after car accident
Tiger Woods
'long way to go'

Tiger Woods opens up about 'tough' recovery after car accident

7 cartoons about Thanksgiving inflation
Political Cartoon.
Feature

7 cartoons about Thanksgiving inflation