Blame the Algos

A recent Financial Times article claims quant trading has changed the rhythm of the markets. Released less than a week after the JPY/AUD ‘flash crash’, the article claims that it is an “inescapable fact” that markets are “undergoing a dramatic, algorithmic evolution”.

However, the author also acknowledges that “the algos” are often the subject of finger-pointing during difficult market conditions, and cites several fundamental drivers for the recent market turbulence, such as the tendency for market liquidity to weaken in December.

What do you think about all the algo-blaming as of late? Do you think the structure of the market really is changing, or are algos just a scapegoat?

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