If you think the stock market can be a gamble, you’d now be wrong. The latest trading software developed by Virtu — a company specialising in high-frequency trading — has had only one day of loss in the past four years.
Put that another way: it means that, for every one day the software makes a loss, it makes 1237 days of profit. It’s in the black 99.91 per cent of the time. That is insane. As Zero Hedge points out, it’s made possible by using high-frequency trading, which relies on speed to reduce risk close to zero on very small trades — we’re talking as low as fractions of cents of profit per deal — while relying on sheer weight of the numbers of transactions to make the exercise profitable.
It means that software from the likes of Virtu is, for now, winning at the stock market — and securing its founder, Vincent Viola, $US270 million in 2013 alone. What it also means, though, is that high-frequency traders are increasingly making most of the money, which will likely lead to one rather unstable financial market. Maths and computer science causing a financial crisis ? Surely not. [Zero Hedge]
Picture: AP