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Technological innovation comes with huge risks in financial markets
Financial markets have greatly improved over the past quarter century. Trading costs, whether for small individual investors or large institutional investors, have declined sharply. The cuts going to...
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Knight Blowup Shows How High-Speed Traders Outrace Rules
The U.S. has the most sophisticated financial markets in the world, yet they can unaccountably spin out of control at a moment’s notice. The latest case involves Knight Capital Group Inc. (KCG), a...
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Astonishing Chart of the Day, HFT Edition, Courtesy of Nanex
This astonishing GIF comes from Nanex, and shows the amount of high-frequency trading in the stock market from January 2007 to January 2012. (Which means that the Knightmare craziness of last week is...
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Regulators Can’t Keep Pace with Market Technology
Stripped down to its essence, the root cause of last week’s trading glitch that nearly wiped out Knight Capital Group (NYSE: KCG) isn’t real complicated. In a nutshell, the problem is that market...
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High Frequency Traders In A Hurry To Get In And Out Of Knight Shares
The Knight Capital convertible preferred documentsare a mess. The basic structure is quite nice: Knight’s new investors are getting a preferred stock that, eliding the details below, pays a 2%...
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