Wall Street Flash Crash Brings Re-evaluation of the Dangers of High Frequency Trading

Wednesday, May 26th, 2010

In a recent blog post, adjunct finance professor Davide Accomazzo discussed the serious structural deficiencies that exist in our financial markets, and the liquidity vacuum that may result. On May 6, 2010, the stock market took a drastic dive, resulting in the second largest point swing and the biggest one-day point decline in Dow Jones Industrial Average history. While the market recovered almost as quickly as it fell, Professor Accomazzo explains in the video below the underlying explanation for this “flash crash,” and revisits his previous warnings about the dangers of machine-generated, or high-frequency trading.

Can’t see the above video? Click this link to watch.

Professor Accomazzo teaches global capital markets and investments/portfolio management and is a frequent writer on the topic of markets and other economic issues. He co-founded Cervino Capital Management in 2005 and is the company’s principal trader.

Topic: Economics, Videos
Tags: , , , ,

Comments

kyler

May 29, 2010 at 5:50 PM

Loved the video. Traders must begin to pay attention to these warnings!


Mission Viejo Dentist

June 2, 2010 at 1:55 AM

Good video, this sudden drop was a very wild and scary day and goes to show how dependent we are on computers now.


Chanel Wallet Sale

June 2, 2010 at 2:47 AM

Professor Accomazzo teaches global capital markets and investments/portfolio management and is a frequent writer on the topic of markets and other economic issues.


Katie

June 3, 2010 at 11:25 AM

Yes the video was good. I am really backing off the market these days. There is a large inherent problem that needs to be worked out. For the past 10 years, the S&P is lower than it was to start? There seems to be too much manipulation going on behind the scenes.


Restaurant Table Linens

June 13, 2010 at 9:08 PM

If proper regulation had been in place, the excesses and disruptions would not have been so great.


custom folding knives

September 5, 2010 at 11:34 AM

In electronic financial markets, algorithmic trading or automated trading, also known as algo trading, black-box trading or robo trading, is the use of computer programmes for entering trading orders with the computer algorithm deciding on aspects of the order such as the timing, price, or quantity of the order, or in many cases initiating the order without human intervention.