Effectively, the only limitation to quicker computation has come down to the speed of the electrons. Thus, those who have attained everything necessary for a few centi or even milliseconds of extra speed, have secured the chance for increased millions or potentially billions annually.
Lucrative as this may seem, many remain skeptical considering the known shortcomings and foreseeable uncertainties. Fundamentally, this robotic system removes the human aspect of trading as the only consideration becomes quantifiable data. Additionally, this manipulation has been classified as parasitic for it fuels off small inflections rather than true variations in market activity. Perhaps most significantly, any accidents can be disastrous and occasionally, irreparable. In the case of the May 6th, DOW Jones 600 point crash, a mutual fund emptied $4.1 billion in securities into the market. Computers instantaneously bought and immediately after sold these shares as programmed. Seeing this, real traders began selling as well causing prices to plummet; the end result was that an accident turned into a mild catastrophe.
Though counter arguments concerning liquidity are brought up the fact remains that this highly effective form of market exploitation must proceed with caution and under unyielding regulation.
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