In 2010 and 2011, high-frequency trading accounted for between 60 and 70% of equity trading volume in the US and nearly 40% in Europe. In 2007, it accounted for less than 40% of the total volume in the US and less than 10% in Europe. The speed of high-frequency trading operations keeps on accelerating. The time it takes to buy or sell equities, bonds, currencies or derivatives on Madrid Stock Exchange has been cut by 10 and is now down to 1 millisecond. This is slow compared to Zurich, where it now takes 37 microseconds to buy or sell equities. The bulk of trading is thus carried out by robots, supercomputers programmed to scan the market to detect minimal differences in price or volume and launch immediate buying or sell actions. It is estimated that “unmanned” high-frequency trading can represent profits exceeding 1 billion € per year for large investment banks.
While business logic and innovation drive are crystal clear, where does responsibility of the consequences of these sell/buy actions lie; who is accountable for the economic and social impact of these actions; who can demonstrate that high-frequency trading is sustainable in the medium-long run? Are these robots the vehicles of self-regulation? Are they the physical expression of the what has been until now unseen: the invisible hand of the market?
Reading Le monde article Les Bourses mondiales lancées dans une course a la microseconde (Audrey Tonnelier, 27 April 2012) has certainly stimulated a lot of questions.