High frequency turnaround: Goldman promoted high-speed trade – n-tv.de NEWS

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 Saturday, June 13, 2015

 
 
 

 
 In high-frequency stores it comes to gain advantages through speed in the financial markets. Hedge funds and investment banks are struggling in a high-tech battle for fractions of seconds. Now Goldman Sachs also want to be involved large.
 

 
 

Goldman Sachs takes a turn at the controversial issue high-frequency trading. The US investment bank was planning to invest heavily in people and technology to attack in this business segment, the financial agency Bloomberg reported, citing insiders circle. The Wall Street firm had demanded last year tougher regulation. The risks on the financial markets would be strengthened by the dramatic increase in automated high-speed transactions, Goldman President Gary Cohn warned in March 2014 in an opinion article in the “Wall Street Journal”.

Now the bank is about to upgrade software and poach a specialized in high-tech trading systems top managers from rival Morgan Stanley. In the coming months, the team should be set up. A spokeswoman declined to comment

Quite surprisingly the offensive but did not come. In January, Goldman Sachs had already gained an expert from the high-frequency traders Allston Trading as reinforcement. In April, the Bank also participated at 20.5 million dollars to Perseus, a company that Turbo dealer furnishes with the network technology.

“Flash Crash”

Automated trading systems follow their securities orders algorithms belong to the stock market now part of everyday life. However, experts warn of the great influence of the trade robot. If there is panic on the markets, HFT can get out of control and accelerating rate developments violently. There is also expected to simple allegation that professional investors are by their savvy technology to stay one step, so that small investors always would be penalized. Therefore, there have been already several investigations by the US financial supervision and the New York Attorney General and Ministry of Justice.

On account of the high frequency trading is in recent years as some breakdown on Wall Street. In April 2013, for example, designed a software problems, the derivatives exchange CBOE in Chicago for half a day lame. In summer 2012, the US stockbroker Knight Capital made headlines. Knight machines had then inadvertently flooded the market with orders and caused chaos. The company was a loss of 440 million dollars. The trading was characterized before the collapse, had to be rescued by several investors. Meanwhile, it has been adopted by the broker Getco.

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In remembrance is on Wall Street also still the so-called flash crash from the year 2010. At that time, dropped the price of the Dow Jones index defaults within minutes to around 1,000 points. Here triggered computer programs of high-frequency traders from selling a cascade, during which the price of some stocks fell to zero dollars. After about half an hour of the nightmare was over – and the Dow almost back where he had lain before his crash. The scandal has brought the Turbo dealer targeted by the regulators, who tightened the screws.

However, the US Department of Justice accused also an individual trader to have triggered the then crash. The Briton Navinder Singh Sarao to have the exchange bombarded by specially engineered software with massive bill orders, thus creating chaos in the market. The 36-year-old was arrested in April in a London suburb and now sits in a British prison. The United States accused him of fraud and manipulation and pushing for his extradition. Sarao allegedly ill-gotten millions for years with his tricks.

  Source: n-tv.de
 

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