New HFT Study Directly Challenges Recent Academic Study

A recently released European academic study claims that High Frequency Trading (HFT) exacerbates volatility and generates flash crashes, directly contradicting a US academic study released less than six months ago. The paper, “Rock Around The Clock: An Agent-Based Model of Low and High Frequency Trading,” written by European academics Sandrine Leal of the ICN Business School in France, Mauro Napoletano and Andrea Roventini from Observatoire Français des Conjonctures Economiques and Giorgio Fagiolo from the Laboratory of Economics and Management takes direct aim at HFT trading techniques. “High-frequency traders use directional strategies to exploit market information produced by low-frequency traders,” the…