4 ms·
eh, there's not much evidence that HFT increases volatility. I work in HFT and in general, HFT decreases volatility. Of course the flash crash is a notable exce
by smabie 6y ago
eh, there's not much evidence that HFT increases volatility. I work in HFT and in general, HFT decreases volatility. Of course the flash crash is a notable exception, but that would never happen today.
- tasuki 6y agoMy intuition also says HFT should usually decrease volatility. Why would a flash crash never happen today?
- gen3 6y agoI would assume that they are referring to the circuit breakers. I wouldn’t consider that fully “fixing” flash crashes.
- ineedasername 6y agoThere's plenty of evidence that HFT increases volatility [0][1][2]. Flash crashes still happen [3] and there were multiple rapid crashes triggering limit down circuit breakers in 2020. The circuit breakers stopped things from getting worse, but didn't stop the crash itself. [0] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1691679 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1691679 [1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2573677 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2573677 [2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2573677 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2573677 [3] https://www.cnbc.com/2015/09/25/what-happened-during-the-aug-24-flash-crash.html https://www.cnbc.com/2015/09/25/what-happened-during-the-aug...