Vanderbilt finance study: No long-term effects for high-frequency trading

Lynn Russo Whylly's picture

High-frequency trading aided by computer algorithms has been blamed for massive disruptions in equities markets in recent years, most notably the Flash Crash of May 2010, in which the Dow Jones Industrial Average plummeted more than 1,000 points in minutes.

While high-frequency trading has been linked to several high-profile episodes, a new study conducted by Vanderbilt University finance professors Nicolas P.B. Bollen and Robert E. Whaley finds there has been no discernable uptick in average global market volatility correlated with the rise of high-frequency computer trading.

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