High Frequency Trading, it’s role in the 2007/2009 financial crisis and the 2010 flash crash
High Frequency Trading (HFT) is automation of the conventional securities trades in exchanges that begins by placing limit buy or sell orders, connecting the buyer to the seller and executing the transaction for profit. HFT began in the wake of the millennium and rapidly grew till 2005, later droppi...
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| Format: | Article |
| Language: | English |
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Master Program in Economics, Graduate Program of Universitas Jambi
2019-03-01
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| Series: | Jurnal Perspektif Pembiayaan dan Pembangunan Daerah |
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| Online Access: | https://online-journal.unja.ac.id/JES/article/view/6154 |
| _version_ | 1811223811686662144 |
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| author | Stanley Kimani Kirika |
| author_facet | Stanley Kimani Kirika |
| author_sort | Stanley Kimani Kirika |
| collection | DOAJ |
| description | High Frequency Trading (HFT) is automation of the conventional securities trades in exchanges that begins by placing limit buy or sell orders, connecting the buyer to the seller and executing the transaction for profit. HFT began in the wake of the millennium and rapidly grew till 2005, later dropping after the 2007-2009 financial crisis; igniting a huge debate. I argue that HFT neither caused the 2007-2009 financial crisis actually occasioned by mispricing of subprime mortgages nor the May 6, 2010 flash crash actually caused by the immediacy problem. That HFT is just an algorithm that attracted mistrust by a section of exchange stakeholders by reason of high speed trade execution. I finally forecast that HFT can only gain more ground after reaching its lowest in 2014, but that it requires regulation to operate in stability. |
| first_indexed | 2024-04-12T08:39:36Z |
| format | Article |
| id | doaj.art-764c03ac662d417d8317405044af5307 |
| institution | Directory Open Access Journal |
| issn | 2338-4603 2355-8520 |
| language | English |
| last_indexed | 2024-04-12T08:39:36Z |
| publishDate | 2019-03-01 |
| publisher | Master Program in Economics, Graduate Program of Universitas Jambi |
| record_format | Article |
| series | Jurnal Perspektif Pembiayaan dan Pembangunan Daerah |
| spelling | doaj.art-764c03ac662d417d8317405044af53072022-12-22T03:39:56ZengMaster Program in Economics, Graduate Program of Universitas JambiJurnal Perspektif Pembiayaan dan Pembangunan Daerah2338-46032355-85202019-03-016442943410.22437/ppd.v6i4.61546154High Frequency Trading, it’s role in the 2007/2009 financial crisis and the 2010 flash crashStanley Kimani Kirika0University of Kigali, RwandaHigh Frequency Trading (HFT) is automation of the conventional securities trades in exchanges that begins by placing limit buy or sell orders, connecting the buyer to the seller and executing the transaction for profit. HFT began in the wake of the millennium and rapidly grew till 2005, later dropping after the 2007-2009 financial crisis; igniting a huge debate. I argue that HFT neither caused the 2007-2009 financial crisis actually occasioned by mispricing of subprime mortgages nor the May 6, 2010 flash crash actually caused by the immediacy problem. That HFT is just an algorithm that attracted mistrust by a section of exchange stakeholders by reason of high speed trade execution. I finally forecast that HFT can only gain more ground after reaching its lowest in 2014, but that it requires regulation to operate in stability.https://online-journal.unja.ac.id/JES/article/view/6154algo-tradingimmediacyhigh frequency financialeconometricslatencyregulation |
| spellingShingle | Stanley Kimani Kirika High Frequency Trading, it’s role in the 2007/2009 financial crisis and the 2010 flash crash Jurnal Perspektif Pembiayaan dan Pembangunan Daerah algo-trading immediacy high frequency financial econometrics latency regulation |
| title | High Frequency Trading, it’s role in the 2007/2009 financial crisis and the 2010 flash crash |
| title_full | High Frequency Trading, it’s role in the 2007/2009 financial crisis and the 2010 flash crash |
| title_fullStr | High Frequency Trading, it’s role in the 2007/2009 financial crisis and the 2010 flash crash |
| title_full_unstemmed | High Frequency Trading, it’s role in the 2007/2009 financial crisis and the 2010 flash crash |
| title_short | High Frequency Trading, it’s role in the 2007/2009 financial crisis and the 2010 flash crash |
| title_sort | high frequency trading it s role in the 2007 2009 financial crisis and the 2010 flash crash |
| topic | algo-trading immediacy high frequency financial econometrics latency regulation |
| url | https://online-journal.unja.ac.id/JES/article/view/6154 |
| work_keys_str_mv | AT stanleykimanikirika highfrequencytradingitsroleinthe20072009financialcrisisandthe2010flashcrash |