On 8/21/2010 10:32 AM Raymond Hettinger said...
On Aug 21, 2:30 am, Lawrence D'Oliveiro<l...@geek-
central.gen.new_zealand> wrote:
Wasn’t HFT an exacerbating factor in just about every major stockmarket
downturn since, oh, 1987?
IMO, it was a mitigating factor.
HFT firms provide liquidity and help price discovery.
Investor sentiment is what drives rallys and crashes.
Mitigating? Trading applications that allow order-of-magnitude bad data
through causing automated trading systems to follow suit dumping stock
at a loss of billions sounds more like an instigating factor.
http://www.nytimes.com/2010/05/07/business/economy/07trade.html
Investor sentiment _should be_ what drives rallys and crashes, and
likely is over extended periods, but appears no longer to be the only
factor in market volatility.
Emile
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