Controlling risk in a lightning-speed trading environment

Carol L. Clark

Chicago Fed Letter, 2010, issue Feb, No 272

Abstract: A handful of high-frequency trading firms accounted for an estimated 70 percent of overall trading volume on U.S. equities markets in 2009. One firm with such a computerized system traded over 2 billion shares in a single day in October 2008, amounting to over 10 percent of U.S. equities trading volume for the day. What are the advantages and disadvantages of this technology-dependent trading environment, and how are its risks controlled?

Keywords: Electronic trading of securities; Stock exchanges (search for similar items in EconPapers)
Date: 2010
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