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Put this down to “Elections can mean something.”<\/p>\nPut this down to “Elections can mean something.”<\/p>\n
It looks like the case of Goldman Sachs’s allegedly purloined high speed trading software<\/a>, aka “Flash Trading”, which a number of observers, myself included, have noted sounds a lot like front-running the entire stock market<\/span>, now appears to be creating some regulatory push-back.<\/p>\n Basically, this allowed high speed servers co-located with the markets to execute trades in the milliseconds between when other trades are initiated, and when they are completed.<\/p>\n First, as a result of questions raised by Senator Charles Schumer, both Nasdaq and Bats Global Markets have decided to stop allowing brokerages to execute trades in this manner<\/a> on their exchanges.<\/p>\n The Financial Times notes that this sort of automated trading currently accounts for over \u00bd of all US stock trades<\/a>.<\/p>\n Additionally, it appears that the S.E.C. is looking at restricting the process<\/a>.<\/p>\n Here is a simple solution: Require that any trading done by computers be delayed by at least 15 minutes from initiation to execution.<\/p>\n It also looks like the S.E.C will crack down on “naked” short sales<\/a>, where an investor sells shares he does not have, as opposed to borrowing shares to sell, which they would purchase and return at a later date.<\/p>\n