Tags: Cuban | NYSE | high | frequency

Mark Cuban Rips NYSE for High-Frequency Trading

Wednesday, 03 Oct 2012 08:47 AM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Instead of solving the problems of high-frequency trading, the New York Stock Exchange is fostering them as it seeks profits for itself, says billionaire investor Mark Cuban.

“It's really just the NYSE protecting their own,” he tells CNBC. “They're the root of this problem despite the fact that people don't want to admit it.”

High-frequency trading (HFT) triggered the Flash Crash of May 6, 2010, in which the Dow Jones Industrial Average plunged 600 points in five minutes. HFT also nearly led to the demise of Knight Capital Group in August.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

As for the NYSE, “they are trying to increase their sales, protecting their best customers, and to do this, they're creating all these different kinds of order types,” Cuban says.

And HFT is one of those types.

“[T]he NYSE and other exchanges create as many as they can to try to get more algorithmic trading to try to enhance more volume and even pay for that volume,” Cuban says.

The real issue is the business model for financial exchanges, he maintains, and HFT is just a function of that.

Ironically enough, HFT traders themselves aren’t running around trying to assure everyone that what they’re doing is safe.

They’re just as scared of a crisis like the one that Knight Capital encountered as anyone else is. "It's terrifying," Mark Gorton, CEO of Tower Research Capital, tells The Wall Street Journal. "Everyone's sitting there saying, 'This could happen to me.'"

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Morningstar's Miller: Utility Stocks Look Good for the Long Run

Wednesday, 01 Oct 2014 19:32 PM

The utilities sector was the only one of the 10 Dow Jones sector indices to post a gain in Wednesday's stock market rout . . .

Casino Mogul Wynn: 'I'm More Scared About US Than China'

Wednesday, 01 Oct 2014 19:13 PM

Steve Wynn, CEO of Wynn Resorts, which earns a majority of its revenue in the Chinese territory of Macau, isn't too worr . . .

MercBloc's Dicker: Oil 'On Its Way to $140' a Barrel

Wednesday, 01 Oct 2014 18:59 PM

U.S. crude oil prices fell to a 17-month low Wednesday at $90.73, but Dan Dicker, president of money manager MercBloc an . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved