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The New Rules Prevent Investors From The Stock Market

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Despite HFT obviously has many positive impact on market, like increased liquidity, improved market efficiency even increased fee for exchanges. Regulators more concern about risk come from HFT in China’s equity market. Though, some risks or negative impacts not really come from high frequency traders. As show in the above example, investors were restricted open a position less than 10 lots result in transaction volume shrank. The new rules prevent investors from participating in the market. Fewer investors will lead to the price distortion. HFT is not the enemy of stock market. If Chinese authorities want the market more healthy, they should hold a positive attitude toward HFT considering HFT has been gaining global popularity.

HFT in other Asia security market
Japan
According to statistics from Bank of Japan, HFT account for more than 50 percent in Tokyo Stock Exchange (TSE) in September 2012, which is the second largest sock exchange in Asia. Rather than attempting to restrict HFT in the market, Japan has made upgrades to its trading system “Arrowhead” to embrace HFT. “Arrowhead” brings millisecond-level speeds to both transactions and market-information distribution, achieves an order execution time of 5 milliseconds and distributes information in 3 milliseconds5. It also distributes all order information on all issues in real time. High frequency traders could get benefit from this real-time access to all order and quote data. In addition, Japan stock market is the

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