Study links ultrafast machine trading with risk of crash
(PhysOrg.com) -- In the United States, ultrafast trading in financial markets between 2006 and 2011 was the underlying factor for over 18,000 extreme price changes, according to a new study. Neil Johnson, a professor in the physics department of the University of Miami in Coral Gables, one of the authors of the study, thinks that a buildup of such "fractures" can destabilize the market. This study, Financial Black Swans Driven by Ultrafast Machine Ecology was submitted to arXiv earlier this month, suggesting the link between extreme-change fractures and market crashes....
Source: PhysOrg - Sunday, 19 February
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