Computers aren’t to blame for the rapid sell-off of United Airlines stock that sent the price from $15 to $3 on news of an erroneous bankruptcy, StreamBase President and Chief Operating Officer Mark Palmer said. The industry founder said that the problem instead lies with platforms using unreliable data.
“As the ‘algorithmic trading wars’ escalate, firms continue their constant search for a competitive edge,” Palmer writes in a blog entry. Since everyone has the same news for trading signal generation, Palmer believes no one has a clear advantage. He sees people are increasingly turning to the “black market” for news – blogs, news feeds, message boards and more.
Palmer believes the solution is simple: “The regulators should step in: automated trading based on unregulated sources of information should be prohibited.”
Read the full text of Palmer’s Blog at http://streambase.typepad.com .
