Mon, Oct 5, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Comment: Last week’s fake AP tweet should not hurt high frequency trading’s reputation

Friday, May 03, 2013

Arjen Gaasbeek
Benedicte Gravrand, Opalesque Geneva:

On Tuesday, April 23rd 2013, a mini sell-off occurred following a fake tweet coming from the Associated Press (AP)’s feed, that announced explosions at the White House. Stocks slumped but recovered within minutes after traders realised it was a hoax. The rapid drop in the stock market was mainly caused by automatic computer systems doing high frequency trading (HFT), according to many commentators.

During next day’s "Battle of Quants" conference in New York, Zeid Barakat, co-founder of Flyberry Capital, a strategic trading firm that uses high-speed trading strategies to trade commodity futures around news events, said he had not traded on the "anomalous" tweet "because he didn’t have the depth of data to feel comfortable modeling a trade," The WSJ reported. And since the Securities and Exchange Commission (SEC) recently allowed corporations to disclose earnings news through social media outlets, Mr. Barakat added he may in future integrate certain Twitter feeds into his firm’s models.

"False news has been around as long as news and inevitably impacts markets," Doug Bry recently told Opalesque by e-mail. "Even before HFT, false news could cause price spikes as people reacted and stops were hit. It's possible the impact is a bit diffe......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Performance - Hedge fund moguls Einhorn, Loeb, Rosenstein lose money in September, Risky strategy sinks small hedge fund[more]

    Hedge fund moguls Einhorn, Loeb, Rosenstein lose money in September From Billionaire stock pickers David Einhorn, Daniel Loeb and Barry Rosenstein on Wednesday told their wealthy investors they lost money in September as market turmoil inflicted more pain on some of America'

  2. Opalesque Exclusive: IRAs represent billions of untapped capital for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva: Retirement accounts might not be the first source that comes to mind for those looking to raise funds, but they may represent billions of untapped capital. Unlike traditional retirement accounts,

  3. Opalesque TV: One way to access market hedge funds in the EU under the AIFMD radar[more]

    Benedicte Gravrand, Opalesque Geneva: While the Cayman Islands, the US and Hong Kong await the pan-European marketing passport to be extended to alternative investment fund

  4. Investing - U.S. biotech bloodbath hits hedge funds but some bargains emerge, Computer-driven hedge funds betting on further stock selloff[more]

    U.S. biotech bloodbath hits hedge funds but some bargains emerge From A seven-day selloff of U.S. biotechnology stocks has hit sector investors - especially hedge funds - hard. But some managers say it was overdone and are already eyeing bargains such as Gilead Sciences Inc

  5. Vilas’ equity long bias hedge fund generates market-beating results[more]

    Komfie Manalo, Opalesque Asia: The Vilas Fund, an equity long bias fund managed by Chicago, Illinois-based Vilas Capital Management, posted five-year annualized returns, net of fees, of 23.47% vs. 15.87% for the S&P 500 Index, including divid