The Present and Future of High Frequency Trading at FEA USP Sao Paulo with Edgar Perez, The Speed Traders Workshop 2012

Posted on January 11, 2012. Filed under: Event Announcements, Exchanges, Flash Crash, Strategies, Technology | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , |

The Speed Traders Workshop 2012 Sao Paulo: How High Frequency Traders Leverage Profitable Strategies to Find Alpha in Equities, Options, Futures and FX

The Speed Traders Workshop 2012 Sao Paulo

Edgar Perez, Adjunct Professor at the Polytechnic Institute of New York University, will speak on The Present and Future of High Frequency Trading at Faculdade de Economia, Administração e Contabilidade, Universidade de São Paulo (FEA USP), Brazil, January 31st, 2012. Mr. Perez, the author of The Speed Traders, Modern Finance Bookof 2012, will review current developments in the algorithmic and high frequency worlds and opportunities and challenges for the industry moving forward:

·         High-Frequency Trading is a set of tools that encompasses a rather diverse number of strategies that prioritize speed, low-latency, volume, liquid instruments and short timeframes

·         High-Frequency Trading has been referred to as the natural progression of technology applied to the investing and trading worlds

·         In the process, High-Frequency Trading has unmasked structural issues in the U.S. equity markets that are currently being examined by legislators and regulators

·         Speed traders will continue finding alpha-generating opportunities by trading new asset classes in new geographies employing more sophisticated tools than ever

Faculdade de Economia, Administração e Contabilidade, Universidade de São Paulo (FEA USP), or School of Economics, Business and Accounting at the University of São Paulo, is a teaching and research institution renowned across the world for its excellence in academic production and undergraduate and graduate programs. The FEA-USP was founded more than 60 years ago to prepare professionals in business, economics and accounting in a nation whose economy was going through a process of democratization after World War II. The school’s initial goal, one which exists to this day, was to form professionals who can contribute to society and make a difference in a positive way. Decades after its creation, FEA continues to set national and international standards in its field. The school follows the high standards of the University of São Paulo and combines its knowledge of the Brazilian reality with the methodology of reputed international institutions to distinguish itself in the preparation of economists, administrators and accounting specialists.

Mr. Perez will also present at BM&FBovespa The Speed Traders Workshop 2012 Sao Paulo: How High Frequency Traders Leverage Profitable Strategies to Find Alpha in Equities, Options, Futures and FX, on February 8th. This workshop will reveal how high-frequency trading players are succeeding in the global markets and driving the development of algorithmic trading at breakneck speeds from the U.S. and Europe to India, Singapore and Brazil, and kicks off a series of presentations in the world’s most important financial centers: Dubai, January 25; Seoul, South Korea, March 28; Kuala Lumpur, Malaysia, April 11; Warsaw, Poland, May 11; Kiev, Ukraine, May 18; Singapore, May 26; Shanghai, China, June 6; Jakarta, Indonesia, June 13; Mexico City, Mexico, July 27; Hong Kong, August 4, and Moscow, Russia, August 10.

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Edgar Perez, Author, The Speed Traders, Keynote Speaker at High Frequency Trading Leaders Forum Singapore

Posted on November 14, 2011. Filed under: Event Announcements, Flash Crash, Practitioners | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , |

Edgar Perez, Author, The Speed Traders, Keynote Speaker at High Frequency Trading Leaders Forum Singapore

Edgar Perez, Author, The Speed Traders

Edgar Perez, Author, The Speed Traders, will be featured Keynote Speaker at High-Frequency Trading Leaders Forum 2011 Singapore (http://www.HFTLeadersForum.com), November 21-23, forum organized by Golden Networking in the world’s major financial centers, including New York, Chicago, Hong Kong, Sao Paulo and London.

Mr. Perez is widely regarded as the pre-eminent networker in the specialized area of high-frequency trading. He is author of The Speed Traders, published by McGraw-Hill, founder of Golden Networking and host of High-Frequency Trading Happy Hour business receptions in New York City, Chicago, London, Hong Kong and Singapore.

Mr. Perez has been featured on CNBC Cash Flow (with Oriel Morrison), BNN Business Day with Kim Parlee, TheStreet.com (with Gregg Greenberg), Channel NewsAsia (with Lin Xue Ling), iMoney Hong Kong, Hedge Fund Brief, The Wall Street Journal, The New York Times, Dallas Morning News and Los Angeles Times. He has been engaged as speaker at Harvard Business School’s 17th Annual Venture Capital & Private Equity Conference, High-Frequency Trading Leaders Forum 2011 (New York, Chicago, Hong Kong, Sao Paulo, Singapore), CFA Singapore, Hong Kong Securities Institute, Courant Institute of Mathematical Sciences at New York University (New York), Global Growth Markets Forum (London), Middle East Hedge Funds Investors Summit 2012 (Dubai, UAE), among other global forums.

Mr. Perez was a vice president at Citigroup, a senior consultant at IBM, and a consultant at McKinsey & Co. in New York City.  Mr. Perez has an undergraduate degree from Universidad Nacional de Ingeniería, Lima, Peru (1994), a Master of Administration from Universidad ESAN, Lima, Peru (1997) and a Master of Business Administration from Columbia Business School, with a dual major in Finance and Management (2002). He belongs to the Beta Gamma Sigma honor society. Mr. Perez resides in the New York City area and is an accomplished salsa and hustle dancer.

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Why Does Perez Illuminate the World of Speed? Insights from The Speed Traders Workshop 2011

Posted on September 27, 2011. Filed under: Event Announcements, Practitioners, Securities, Strategies, Technology | Tags: , , , , , , , , , , , , , , , , , , , , , , |

The Speed Traders Workshop 2011, The Present and Future of High-Frequency Trading

The Speed Traders Workshop 2011

Edgar Perez, author of The Speed Traders, An Insider’s Look at the New High-Frequency Trading Phenomenon That is Transforming the Investing World (http://www.thespeedtraders.com), will present first ever The Speed Traders Workshop 2011, “The Present and Future of High-Frequency Trading” (http://www.thespeedtradersworkshop.com), in Chicago, Sao Paulo, Singapore and Hong Kong. The Speed Traders Workshop 2011will be extremely helpful for all delegates who are working in finance and investments, from financial institutions, investment banks, hedge funds, pension funds, broker dealers, consultancy groups, prime brokers, solution providers and exchanges, who wish to gain a thorough understanding and practical knowledge of high-frequency trading.

The Speed Traders Workshop 2011, led by Edgar Perez, author of The Speed Traders, will reveal how high-frequency trading players are succeeding in the global markets and driving the development of algorithmic trading at breakneck speeds from the U.S. and Europe to India, Singapore and Brazil. Highlights of The Speed Traders Workshop 2011 include:

  • The first and most comprehensive initiation to the world of high-frequency trading
  • Study materials provided by Edgar Perez, the author of the latest book on the subject of speed trading, and a well-known presenter in America, Europe and Asia
  • Latest update on high-frequency trading in the world and current regulatory initiatives
  • Techniques to detect high-frequency trading in the markets
  • Key enablers of high-frequency trading in the U.S., Europe and Asia
  • Proposed regulatory initiatives after the “flash crash”
  • Up-to-date review of the future of high-frequency trading

The Speed Traders, published by McGraw-Hill Inc., is the most comprehensive, revealing work available on the most important development in trading in generations. High-frequency trading will no doubt play an ever larger role as computer technology advances and the global exchanges embrace fast electronic access. The Speed Traders explains everything there is to know about how today’s high-frequency traders make millions—one cent at a time. In this new title, The Speed Traders, Mr. Perez opens the door to the secretive world of high-frequency trading. Inside, prominent figures drop their guard and speak with unprecedented candidness about their trade.

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Long-Term Investors’ Fears Driving Increased Volatility

Posted on August 29, 2011. Filed under: Economy, Financial Crisis, Flash Crash, Strategies, Technology | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

The Speed Traders' Edgar Perez with BNN's Kim Parlee

The Speed Traders' Edgar Perez with BNN's Kim Parlee

For Edgar Perez, author of The Speed Traders, An Insider’s Look at the New High-Frequency Trading Phenomenon That is Transforming the Investing World (http://www.thespeedtraders.com), increased volatility experienced by financial markets is being driven by long-term investors’ fears. Mr. Perez, who was recently featured on BNN’s Business Day and interviewed by Kim Parlee, reflected that similar concerns drove volatility to record heights during the Great Depression and Black Monday.

The stock market crash on October 29, 1929 set in motion a series of events that led to the Great Depression, but in fact, the American economy and global economy had been in turmoil six months prior to Black Tuesday, and a variety of factors before and after that fateful date in October caused and exacerbated the Great Depression. While America prospered during the 1920s, most of Europe, still reeling from the devastation of World War I, fell into economic decline. America soon became the world’s banker, and as Europe started defaulting on loans and buying less American products, the Great Depression spread. With only loose stock market regulations in place before the Great Depression, investors were able speculate wildly, buying stocks on margin, needing only 10% of the price of a stock to be able to complete the purchase. Rampant speculation led to falsely high stock prices, and when the stock market began to tumble in the months leading up to the October 1929 crash, speculative investors couldn’t make their margin calls, and a massive sell-off began. While the great rise in the stock market (from 181 points in early 1928 to 381 points in September 1929) was fueled by optimism and false hope, the plunge was flamed by stark fear.

Similar situation happened on Black Monday, the name given to Monday, October 19, 1987, when stock markets around the world ‘crashed’, shedding a huge value in a very short period. The crash began in Hong Kong, spread west through international time zones to Europe, hitting the United States after other markets had already declined by a significant margin. At the time, economists feared that if the U.S. economy faltered, the entire world economy would stumble and fall into recession again, as it had in 1981–82. Many observers now believe the panic of Black Monday simply reflected a spreading fear that the world situation was rapidly becoming unmanageable.

Fast forward to 2011, CNN’s Richard Quest concludes too that the causes of this latest crisis are fear, worry and concern, three uncomfortable bedfellows that have wreaked havoc on the world’s financial markets. “What pushed everyone over the edge was the debt ceiling debacle and the downgrading of U.S. debt by ratings agency Standard & Poor’s, that was followed by a 630 point fall in the Dow Jones index.”

Fear that the world situation is becoming unmanageable is driving long-term investors to dump equities and look for protection in less risky instruments, ironically, recently S&P downgraded U.S. treasuries. Economists at JPMorgan, in their weekly reprise of economic developments, blamed the recent global stock selloff on “a sense of policy paralysis in the U.S. and Europe, which has driven home the point that there is no cavalry to ride to the rescue.” While the sentiment is the same as in the 20s, 1987 and now, certain market participants will always look for a culprit, role played by high-frequency trading this time. No doubt if another crisis comes our way in the future, another group will receive the blame, only to be absolved by financial historians.

The Speed Traders' Edgar Perez on Canada's BNN's Business Day

The Speed Traders' Edgar Perez on BNN's Business Day

BNN’s Business Day puts a spotlight on the stocks and stories expected to move the markets, and then switches to minute-by-minute coverage throughout the trading day in Canada and the U.S. Kim Parlee, Marty Cej, Frances Horodelski, and Martin Baccardax along with BNN‘s team of reporters and expert guests provide comprehensive reporting along with the best background and analysis in the business. Business News Network (BNN) is the Canadian English language cable television business channel; BNNbroadcasts programming related to business and financial news and analysis.

The Speed Traders, published by McGraw-Hill Inc., is the most comprehensive, revealing work available on the most important development in trading in generations. High-frequency trading will no doubt play an ever larger role as computer technology advances and the global exchanges embrace fast electronic access. The Speed Traders explains everything there is to know about how today’s high-frequency traders make millions—one cent at a time. In this new title, The Speed Traders, Mr. Perez opens the door to the secretive world of high-frequency trading. Inside, prominent figures drop their guard and speak with unprecedented candidness about their trade. For more about The Speed Traders, readers can visit its Facebook and Twitter pages, as well as the most popular online retailers, including Amazon, Barnes & Noble and Borders, among others.

Mr. Perez is widely regarded as the pre-eminent networker in the specialized area of high-frequency trading. He has been featured on CNBC Cash Flow with Oriel Morrison (http://video.cnbc.com/gallery/?video=2023403523), BNN Business Day with Kim Parlee (http://watch.bnn.ca/business-day/august-2011/business-day-august-19-2011/#clip519647), TheStreet.com with Gregg Greenberg (http://www.thestreet.com/video/11144274/high-frequency-traders-not-the-enemy.html), and Channel NewsAsia Cent & Sensibilities with Lin Xue Ling, and engaged as speaker at Harvard Business School’s 17th Annual Venture Capital & Private Equity Conference, High-Frequency Trading Leaders Forum 2011 (New York, Chicago, Hong Kong, Sao Paulo, Singapore), CFA Singapore, Hong Kong Securities Institute, Courant Institute of Mathematical Sciences at New York University (New York), Global Growth Markets Forum (London), Technical Analysis Society (Singapore), Middle East Hedge Funds Investors Summit 2012 (Riyadh, Saudi Arabia), among other global forums.

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First Ever: The Speed Traders Workshop 2011 with Author Edgar Perez, in Hong Kong, Chicago, Sao Paulo and Singapore

Posted on August 16, 2011. Filed under: Event Announcements, Practitioners, Strategies, Technology | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

The Speed Traders Workshop 2011, "The Present and Future of High-Frequency Trading"

The Speed Traders Workshop 2011

Edgar Perez, author of The Speed Traders, An Insider’s Look at the New High-Frequency Trading Phenomenon That is Transforming the Investing World (http://www.thespeedtraders.com), will present first ever The Speed Traders Workshop 2011, “The Present and Future of High-Frequency Trading” (http://www.thespeedtradersworkshop.com), in Hong Kong, Chicago, Sao Paulo and Singapore. The Speed Traders Workshop 2011will be extremely helpful for all delegates who are working in finance and investments, from financial institutions, investment banks, hedge funds, pension funds, broker dealers, consultancy groups, prime brokers, solution providers and exchanges, who wish to gain a thorough understanding and practical knowledge of high-frequency trading.

High-frequency traders have been called many things, from masters of the universe and market pioneers to exploiters, computer geeks, and even predators. Everyone in the business of investing has an opinion of speed traders, but how many really understand how they operate? The shadow people of the investing world, today’s high-frequency traders have decidedly kept a low profile, until now. The Speed Traders Workshop 2011 opens the door to the secretive world of high-frequency trading, the most controversial form of investing today; in the name of protecting the algorithms they have spent so much time perfecting, speed traders almost never talk to the press and disclose as little as possible about how they operate.

The Speed Traders Workshop 2011, led by Edgar Perez, author of The Speed Traders, will reveal how high-frequency trading players are succeeding in the global markets and driving the development of algorithmic trading at breakneck speeds from the U.S. and Europe to India, Singapore and Brazil. Highlights of The Speed Traders Workshop 2011 include:

  • The first and most comprehensive initiation to the world of high-frequency trading
  • Study materials provided by Edgar Perez, the author of the latest book on the subject of speed trading, and a well-known presenter in America, Europe and Asia
  • Latest update on high-frequency trading in the world and current regulatory initiatives
  • Techniques to detect high-frequency trading in the markets
  • Key enablers of high-frequency trading in the U.S., Europe and Asia
  • Proposed regulatory initiatives after the “flash crash”
  • Up-to-date review of the future of high-frequency trading

The Speed Traders, published by McGraw-Hill Inc., is the most comprehensive, revealing work available on the most important development in trading in generations. High-frequency trading will no doubt play an ever larger role as computer technology advances and the global exchanges embrace fast electronic access. The Speed Traders explains everything there is to know about how today’s high-frequency traders make millions—one cent at a time. In this new title, The Speed Traders, Mr. Perez opens the door to the secretive world of high-frequency trading. Inside, prominent figures drop their guard and speak with unprecedented candidness about their trade.

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The Speed Traders’ Edgar Perez to CNBC’s Oriel Morrison, Criticism of High-Frequency Trading Phenomenon Unfair

Posted on June 24, 2011. Filed under: Event Announcements, Exchanges, Flash Crash, Practitioners, Technology | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

The Speed Traders' Edgar Perez to CNBC's Oriel Morrison, Criticism of High-Frequency Trading Phenomenon Unfair

The Speed Traders' Edgar Perez to CNBC's Oriel Morrison, Criticism of High-Frequency Trading Phenomenon Unfair

Edgar Perez, author, The Speed Traders: An Insider’s Look at the New High-Frequency Trading Phenomenon That is Transforming the Investing World, explained in detail the role high-frequency trading has been playing in the equity markets to CNBC Cash Flow’s Oriel Morrison; the interview is available on CNBC’s website at http://video.cnbc.com/gallery/?video=2023403523. High-frequency trading, in which computers may buy and sell thousands of shares in fractions of a second, had come under criticism after the Dow Jones Industrial Average lost almost 1,000 points intraday on May 6, 2010, before recovering just as quickly.

Mr. Perez described high-frequency trading as the natural progression of technology applied to the investing and trading worlds. In the process, high-frequency trading has certainly unmasked structural issues in the U.S. equity markets that are currently being examined by legislators and regulators in an effort to further strengthen financial markets. He indicated that, on balance, the impact of high-frequency trading is positive for all other market participants thanks to the increased liquidity it provides to retail and institutional investors.

High-frequency traders replace traditional specialists in providing liquidity in a much more competitive frame work. Liquid and efficient capital markets are extremely important for economic development. While some feel that high-frequency traders spending millions of dollars on infrastructure to be a few microseconds faster than the other guy, is somehow, from a social perspective, not money “well spent”, it can be argued that this is just the way that competitive markets find equilibrium.

The Speed Traders: An Insider's Look at the New High-Frequency Trading Phenomenon That is Transforming the Investing World

The Speed Traders: An Insider's Look at the New High-Frequency Trading Phenomenon That is Transforming the Investing World

As expressed by Stuart Theakston, Head of Quantitative Research and Automated Trading  with GLC and one of the practitioners featured in The Speed Traders, high-frequency trading has all the attributes required to make a perfect scapegoat:

  • It is hard to understand, or at least, it takes a bit of effort to understand (even professional long-only institutional investors have difficulty understanding it)
  • It is fairly exclusive, as the firms involved, either have no incentive to talk about what they do (because they are proprietary trading firms and don’t need to attract external capital), or are not allowed to (because they are hedge funds and have regulatory constraints on marketing themselves)
  • It employs individual participants having very high levels of academic qualifications, mostly PhDs
  • It has some large dollar numbers associated with it (though more in terms of turnover than profitability, as further detailed in The Speed Traders)
  • It has lots of terminology associated with it that sounds geeky and confusing to the uninitiated: ‘microsecond’, ‘co-location’, ‘momentum ignition’, ‘temporal arbitrage’ etc.
  • Some intelligent, well informed and eminently quotable people are railing against it (Mario Gabelli, Paul Wilmott, Richard Bookstaber, among others)
  • It is prone to occasionally be a contributory factor (or, in fact, its switching off was a contributory factor) to events perceivable by the public, like the “flash-crash”

The Speed Traders, http://www.TheSpeedTraders.com, published by McGraw-Hill Inc., is the most comprehensive, revealing work available on the most important development in trading in generations. High-frequency trading will no doubt play an ever larger role as computer technology advances and the global exchanges embrace fast electronic access. The Speed Traders explains everything there is to know about how today’s high-frequency traders make millions—one cent at a time.”

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The Speed Traders’ Author, Edgar Perez, to Address Hong Kong Securities Institute

Posted on June 7, 2011. Filed under: Event Announcements, Exchanges, Securities | Tags: , , , , , , , , , , , , , |

Hong Kong Securities Institute

Edgar Perez, Author, The Speed Traders, http://www.TheSpeedTraders.com, will address a members-only session of the Hong Kong Securities Institute, professional body that aims to raise the standards of securities and finance practitioners in Hong Kong, June 28, on The Present and Future of High-Frequency Trading.

Hong Kong Securities Institute was officially formed in December 1997 as a professional body to raise the standards of securities and finance practitioners in Hong Kong. In setting standards for professional excellence in Hong Kong, the HKSI offers a platform where individuals can gain the skills, and achieve the necessary professionalism and personal competence as they proceed towards further career advancement. The HKSI provides continuous professional development by offering comprehensive examinations and an extensive programme of training courses and events. Finance professionals benefit from HKSI membership programme which provides invaluable support and professional recognition from industry peers as well as substantial discounts on a variety of HKSI programmes.

The Speed Traders, http://www.TheSpeedTraders.com, published by McGraw-Hill Inc., is the most comprehensive, revealing work available on the most important development in trading in generations. High-frequency trading will no doubt play an ever larger role as computer technology advances and the global exchanges embrace fast electronic access. The Speed Traders explains everything there is to know about how today’s high-frequency traders make millions—one cent at a time.

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Book Review: ‘The Speed Traders’, by Seeking Alpha’s Brenda Jubin

Posted on May 5, 2011. Filed under: Book Review, Flash Crash, Practitioners | Tags: , , , , , , , , , , , , , , , , |

High-frequency trading has mesmerized people in search of easy money, has challenged regulators, and has been an easy target for the press. In The Speed Traders: An Insider’s Look at the New High-Frequency Phenomenon That Is Transforming the Investing World(McGraw-Hill, 2011) Edgar Perez tries to set the record straight. Alternating between an annotated timeline of the development of high-frequency trading and interviews with top high-frequency traders, Perez illuminates the world of speed.”

The Speed Traders: An Insider’s Look at the New High-Frequency Trading Phenomenon That is Transforming the Investing World“We normally think of high-frequency trading as super-fast order processing, measured in microseconds. And, yes, it is. But a traders’s data feed (whether market quotes or news feed) also has to be lightning fast, as does his database management system.”

Perez explores the charges that have been brought against high-frequency trading and for the most part, with the help of his interviewees, tries to dispel them. Did high-frequency trading cause the Flash Crash? No. As David Cummings, chairman of Tradebot Systems, wrote: ‘Who puts in a $4.1 billion order without a limit price? The trader at Waddell & Reed showed historic incompetence.'”

“Some traders also point the finger at the practice of busting trades, which can punish liquidity providers. The Speed Traders offers a sympathetic portrait of an industry that is often demonized. By tracing its roots (going back to Instinet, which began operating under an unwieldy name in 1970), Perez demonstrates it to be a logical development of technological change in the financial markets. By separating out some controversial practices, such as flash orders, from high-frequency trading, Perez makes it more defensible. All in all, an enlightening book.”

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The Real Story Behind the Flash Crash in ‘The Speed Traders’, The Most Comprehensive Book on High-Frequency Trading

Posted on May 3, 2011. Filed under: Exchanges, Flash Crash, Practitioners | Tags: , , , , , , , , , , , , |

The Real Story Behind the Flash Crash at 'The Speed Traders', The Most Comprehensive Book on High-Frequency Trading

The Speed Traders: An Insider's Look at the New High-Frequency Trading Phenomenon That is Transforming the Investing World

The real story behind the flash crash, the sudden decline and ultimate recovery of the U.S. financial markets on May 6, 2010, is described in unprecedented detail in The Speed Traders, An Insider’s Look at the New High-Frequency Trading Phenomenon That is Transforming the Investing World (http://www.thespeedtraders.com), book by recognized author Edgar Perez.

Building on interviews with influential high-frequency traders that experienced the flash crash first-hand, Mr. Perez has been able to build a narrative that captures the readers’ attention. Referring to Manoj Narang, Chief Executive Officer of Tradeworx, the book says: “As early as May 7, 2010, it was pretty apparent to him what had happened. Investors were on hair-trigger alert because of a huge run-up (around 70 percent in 12 months) in stock prices, because of recent weakness (down around 7 percent for the week before May 6), and because of geopolitical events, particularly the threat that Greece and other European nations would default on their sovereign debt. Into this economic backdrop a mutual fund dumped around $4 billion worth of Standard & Poor’s (S&P) E-Mini futures contracts into the open market, setting off a self-reinforcing wave of selling. Mr. Narang has calculated that the mutual fund’s trade had a likely impact of about 3 percent on the S&P 500 Index’s price over the course of a few minutes. This was a rather large impact, particularly at a time when the market was already spooked. Thus a snowball quickly turned into an avalanche as investors’ stop-loss orders were repeatedly set off at lower and lower levels.”

The book explains that no matter what regulators do as part of liquidity obligations, no matter how much they force people to stay in the market, there will be times when herd like behavior among long-term investors will see them all stampeding for the exits at the same time; there simply won’t be enough high-frequency trading to cover the demand for liquidity. Liquidity crises are not driven by the lack of liquidity but by the demand for liquidity. This is why Mr. Narang thinks that it is a bit misguided on the part of regulators to try to prevent flash crashes from occurring. In order to prevent liquidity crises from occurring, regulators would need to prevent herd like behavior among long-term investors, because that’s what causes bubbles and that’s what causes liquidity crises.

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