What is it about?
The apocryphal story of how the Rothschilds made their fortune goes that in 1815 when Napoleon lost the battle of Waterloo, using carrier pigeons Nathan Rothschild learned of the outcome earlier than other British bond traders and made a fortune. The point is that speed translates to profits. Today, high-frequency traders use computer algorithms and privileged market access that other traders do not enjoy to trade incredibly fast. In this study, we use novel visual tools to understand the advantages that speed provides to traders.
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Why is it important?
This study is important because the extreme trading speed afforded to only a few traders may result in enormous profits. Also, the enormous investment in the technology infrastructure to generate this speed may not provide any other benefit except to the few traders who can afford it.
Read the Original
This page is a summary of: Revealing High-Frequency Trading Provision of Liquidity with Visualization, January 2019, ACM (Association for Computing Machinery),
DOI: 10.1145/3305160.3305214.
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