High frequency trading is an automated trading platform used by large investment banks, hedge funds and institutional investors which utilizes powerful computers to transact a large number of orders a

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High frequency trading is an automated trading platform used by large investment banks, hedge funds and institutional investors which utilizes powerful computers to transact a large number of orders at extremely high speeds. For this DB, please watch the following shorter video (about 11 minutes) that describes how high frequency trading works:

High Frequency Trading (https://www.youtube.com/watch?v=z4nCTdQlH8w)

Next, watch the longer video (about 45 minutes) that explains how “algorithmic trading” (that is, computer programmed trading that executes trades based on a mathematical model) impacted the U.S. stock market on May 6, 2010:

Algorithmic Trading– Impact of Automated Trading Programs On Markets Documentary (https://www.youtube.com/watch?v=OgS52RyiO_M)

Finally, read the following article that warns against overly regulating high frequency trading:

Is High Frequency Trading Really Such A Bad Thing? (https://www.personalcapital.com/blog/investing-markets/high-frequency-trading-really-bad-thing/)

There are three parts to your post for this week.

PART ONE: Find an online trading company through which investors can buy and sell stocks online (or through mobile apps) free of charge. The key here is to find a company (most likely a FinTech company or a traditional company that has moved in the “trade for free” direction due to pressure from the FinTech industry) that allows investors to buy stocks without charging a transaction or brokerage fee. Describe the company and clearly define the “trade for free” process.

PART TWO: Based on your viewing of the two videos listed above and your reading of the article listed above, share with the class whether or not you think high frequency trading makes the financial markets MORE or LESS efficient. Why?

PART THREE: Do you think FinTechs, in general, will make trading markets more or less volatile? Be specific and provide solid defense in your post for the position you take.

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