Related Stories
Computer stock trades: Big profits in seconds
Key Excerpts from Article on Website of New York Times
Posted: May 10th, 2010
http://www.nytimes.com/2009/07/24/business/24trading.html
It is the hot new thing on Wall Street, a way for a handful of traders to master the stock market, peek at investors orders and, critics say, even subtly manipulate share prices. It is called high-frequency trading and it is suddenly one of the most talked-about and mysterious forces in the markets. Powerful computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone elses expense. These systems are so fast they can outsmart or outrun other investors, humans and computers alike. And after growing in the shadows for years, they are generating lots of talk. Nearly everyone on Wall Street is wondering how hedge funds and large banks like Goldman Sachs are making so much money so soon after the financial system nearly collapsed. High-frequency trading is one answer. And when a former Goldman Sachs programmer was accused this month of stealing secret computer codes software that a federal prosecutor said could manipulate markets in unfair ways it only added to the mystery. Goldman acknowledges that it profits from high-frequency trading, but disputes that it has an unfair advantage. Yet high-frequency specialists clearly have an edge over typical traders, let alone ordinary investors.
Note: For a wealth of deep reporting on the hidden realities of Wall Street's shadowy operations, click here.
Related Stories
Latest News
Key News Articles from Years Past
