On February 8, the Financial Times published an article on growing concerns among some in the commodities industry that so-called “algorithmic” trading — futures trading with high-speed computers — is causing price distortions. As the article put it, “Ten years ago it took the sugar market six months to move 2 cents. In the past three months, it has moved 2 cents in just one day on five occasions. Last Thursday, it moved this much in a single second.”
The article also stated, however, that not everyone agrees that high-speed traders are to blame. Some traders reportedly said that “the increase in volatility simply reflects high prices for sugar.”
This post was originally published on the legacy ABA Section of Administrative Law and Regulatory Practice Notice and Comment blog, which merged with the Yale Journal on Regulation Notice and Comment blog in 2015.