When the Dow Index sank 1000 points in roughly 20 minutes on May 7th, most people were shocked. Many articles and television shows blamed the increasing pressure on Greece and the lack of a bailout. However, the plunge goes much further than international worries and buries itself on the bottom of the ethical totem pole.
Ever hear about an algorithmic trading platform? How about high frequency trading? Well, we'll be talking about each in this next blog post, and how it related to the crash.
High frequency trading computer servers are able to beat other computers because they are located at the exchanges. They take crucial advantage of the finite speed of light and switching systems to run the market at the front of the lines. They also gain information on orders and market movements more quickly than the market as a whole.
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