John Bates

As Aerosmith famously sang: "Rats in the cellar... losin' money, getting no affection." Lately, HFTs have been compared to everything from rats in a granary to highway robbers intent on stealing Granny's pension. Bashing high frequency trading firms has become the latest sport in the financial services industry....

After three years of severe market volatility, and a jaw-dropping flash crash, the financial rock star phenomenon known as high frequency trading (HFT) looks a little burned out. Like many rock stars, HFT seems to be suffering from too many late night parties and some incredibly unflattering press. And its...

The Italian stock exchange Borsa Italiana's decision to clamp down on "excessive" HFT orders is likely to be a shot heard around the world. The Borsa is considering charging HFT firms for sending too many orders, particularly ones that do not result in trades, according to the FT.

Another firm has jumped on the Twitter sentiment bandwagon; Topsy Labs is planning to release a Twitter trading tool to investors later this year. Topsy follows U.K. hedge fund Derwent Capital, which launched a fund last year using a Twitter algo that claims to predict market direction three or four...

You can tell that the end of the year is nigh when discussions on Wall Street and the City turn to bonuses. Bonus time in 2012 looks to be pretty disappointing given the year the banks and hedge funds have had, but bonuses are not the only things that will...

Imagine a damaging rumor about a company that you own shares in is posted on Twitter. Algorithms monitoring social media feeds to gauge market sentiment and act upon news could instantaneously trade billions of dollars worth of these shares, causing the value to plummet. The rumor is entirely untrue but,...

New regulations on both sides of the Atlantic have given the financial markets the shivers, as they worry about the repercussions. The Volcker Rule, the part of the Dodd-Frank Act that mandates banks stop proprietary trading activities, has been battered by financial market lobbyists, denigrated by the bulge bracket, and...

At the Business of a Better World Conference last week, former U.S. Vice President Al Gore said that one of the biggest obstacles to investments in sustainable business is the "impatient, short-term" mindset of investors coupled with a "debilitating" reliance on automated financial transactions. He called...

When Bank of America announced on September 29th that it would start charging its customers for using their debit cards, the howls of outrage were heard around the U.S. BofA's website crashed and continued to have outages for days -- although it is not clear whether that was...

In Star Trek: The Next Generation, when Captain Jean-Luc Picard says "make it so", 'it' usually happens. If life were that simple, regulators around the world could tell capital markets participants to get a grip on trading risks. Regulators could utter the phrase "make it so" and traders, risk and...

There was a brilliant article recently on the BBC website posing the theory that algorithms are taking over the world. It is true that algorithms are now being used for everything from finding friends on Facebook to making trading decisions based on Twitter sentiment. High frequency trading, the...

NASA's report this week that the March earthquake in Japan directly resulted in the formation of icebergs in Antarctica was but the latest example of the quake's widespread and long-lasting impact. When a 9.0 magnitude quake hit the east coast of Japan in March and caused a tsunami,...

Historically, fat finger trades -- where a trader presses the wrong key or adds a zero too many on an electronic trading system -- were considered exclusive to equities markets. Not anymore. They are now stretching their piggy little digits across into other asset classes.

Most recently, on June 8,...