Law and Tech A weblog on Law and Technology

24Jul/090

High Speed Trading

The New York Times reports on High Speed Trading, using a loophole in the market large firms are cashing in by being able to see trades 30 milliseconds faster than the rest of the market. This coupled with co-location of computer systems give these large firms like Goldman Sachs an advantage as they are able to execute automated trading using these computers faster than it takes to blink. These came to light when a former employee of Goldman was arrested for allegedly stealing the software code that runs these machines.

The inequity that high speed trading gives these large corporations billions of dollars a year, all on the backs of the little investor who certainly can not compete with the technology of these behemoths. It appears time for the SEC to step in and regulate, at least investigate, these practices.