High-speed trading algorithms place markets at risk

Jacob Aron, technology reporter

Computers that buy and sell shares in a fraction of a second are in danger of destabilising stock markets around the world says Andrew Haldane, executive director for financial stability at the Bank of England. Speaking last night at the International Economic Association in Beijing, China, Haldane said that High Frequency Trading (HFT) firms were in a "race to zero" that could increase market volatility.

HFT algorithms can execute an order in just a few hundred microseconds, rapidly trading shares back and forth in order to quickly eke out profits from minor differences on the various exchanges.