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Industry Split Over High Frequency Trading Regulation

TradeTech West, the west coast’s premier equity trading event, announced the results of its second equity trader survey today. The survey was conducted among TradeTech’s buy-side and sell-side trader community.

Trade Tech polled over 46 traders and when asked if they thought more regulation of high frequency trading will be better or worse for the market, there was an exact divide between the two, with 41.3% favoring the initiative, and 41.3% saying it will make the market worse.

Other key findings of the survey include:
•Despite the split over regulation there was greater consensus over high frequency trading’s contribution to market volatility with 65% believing that it does have an impact. In addition, 61% of responders think that it raises the costs of trading for non-high frequency traders.
•When asked about flash orders, 50% of traders believe they should be banned, whereas, 41% do not feel this is necessary.
•When asked about firms using co-location services with exchanges 41% said they believe that they receive a fair advantage and 39% saying they receive an unfair advantage.

“It is no surprise that traders have opposing views on many financial issues, however, to see traders divide themselves this closely down the middle demonstrates a real deadlock in the industry about this issue” said Sara Mueller, Executive Director, TradeTech North America. “The results of this survey have certainly shown us that high frequency trading is still a hot topic that many in the industry feel passionately about.”