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algo trading is to blame for volatility (Read 5194 times)
qroach
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algo trading is to blame for volatility
12/06/08 at 11:53:24
 
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Co0olCat
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Re: algo trading is to blame for volatility
Reply #1 - 12/19/08 at 00:41:20
 
Why I am not surprised... It looks like 1987 again. Time-machine works!!!
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Re: algo trading is to blame for volatility
Reply #2 - 12/22/08 at 00:10:15
 
Not unexpected. This is yet another avenue for highly adaptive trading models that take advantage of the volatility spikes caused by algorithms with short-term memory and/or optimised for the most recent data.
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Re: algo trading is to blame for volatility
Reply #3 - 01/23/09 at 01:04:17
 
I would be curious to read a study on how volatility changed with respect to the simultaneous removal of short term uptick rule and trading collar 80a.  Is it just a coincidence that a 1987 style 10+sigma event occurred just after the change?  
Interesting how their "studies" showed absolutely no possible volatility impact would result from changes in the rules.  

Don't want to become a board cynic here, but certainly that was some coincidence.  Although, admittedly there were signs of increased volatility even before that; it's just as if the rules were changed to exasperate the break in volatility bands right before they approached the cliff's edge.
Kind of like throwing grease on a fire right as it begins to lose control.
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Re: algo trading is to blame for volatility
Reply #4 - 02/14/10 at 02:45:53
 
In my perspective, volatility could be a good thing or a bad thing. It also drives the markets for many people who are attempting to invest and make a profit. It also allows many companies that are available for investing to be more competitive and try to drive their stock prices up.

If the market was always stable, I think there would be more of an issue. Volatility basically allows people who are trading the markets to enter and exit with little limitation.
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