Agricultural Economics Department

 

Date of this Version

10-28-2015

Citation

Cornhusker Economics, October 28, 2015, agecon.unl.edu/cornhuskereconomics

Comments

Copyright 2015 University of Nebraska.

Abstract

During this month of October, we have read in the news several articles about trading in futures markets related to recent practices that are becoming increasingly prevalent. A US presidential candidate suggested the creation of a tax on high-frequency trading (HFT), referring to it as unfair and abusive. The focus appeared to be on the large magnitude of order cancellations in some HFT strategies. We also read in the news that the Commodity Futures Trading Commission (CFTC), the US derivatives regulator, filed a complaint against a Chicago-based proprietary trading firm that has allegedly been “spoofing” futures markets. Then the head of the CFTC indicated that the agency plans to address turbulence in Treasury futures markets, supposedly caused by automated trading. And there is the trial of an investor accused of “spoofing” commodity futures markets, who the Chicago Tribune reported to be the first criminal defendant to be “tried under the anti-spoofing legislation included in the 2010 Dodd-Frank Act”.

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