HFTs blamed for market swings

Recently, stock markets around the world have been subject to wild swings, which has led to record profits for high frequency traders, says The Wall Street Journal. In London, Paul Myners, a former United Kingdom treasury minister, has called for an inquiry into high frequency trading to see how it may have contributed to stock price volatility over the past few weeks.

When it comes to high frequency trading there are many observations and opinions. One imaginative blogger manages to mix high frequency trading with pop entertainment. Being the keen observer he is, he has noticed that when the actress Anne Hathaway is in the news, Warren Buffet's Berkshire-Hathaway stock goes up. He has some statistics that he thinks support his theory. On Feb. 25, the Friday before she hosted the Oscars, Berkshire's stock rose $2,522 to $127,550, or 2.02 per cent. Then, on Monday, Feb. 28, the day following the Oscars, the stock rose another $3,750 to $131,300, or 2.94 per cent. From this, he concludes that computers trawling through news stories and seeing "Hathaway" foolishly set about buying shares of Berkshire Hathaway. The stock has since fallen to $107,839. Ms. Hathaway has a new movie, One Day, which comes out this Friday, Aug. 19, another opportunity for the blogger to test his theory.

by Stockwatch Business Reporter