Monday, January 4, 2016

China Trying To Target High-Frequency Traders

Global stock markets tumbled as worries from growing tension in the Middle East, worries about the global economy, and China's tentative plan to charge a tax or fee for the cancellation of orders in order to reign in high frequency trading. Obviously, the sharp decline in Chinese stocks suggests that traders don't like it. The spin masters, largely ignoring an accelerating downtrend in the US and emerging market economies, will spend a lot of time debating and pointing fingers about the merits of the proposed legislation.

Headline: China and Clinton Agree: Traders Should Pay for Canceled Orders

Chinese securities regulators are preparing some of the world’s strictest regulations on a trading practice at the heart of the global debate over high-speed computerized markets.

The draft rules are designed to prevent traders from flooding exchanges with orders they don’t fill by charging market participants fees for habitual cancellations. The proposal, which could come into force next year, echoes a plan by U.S. presidential hopeful Hillary Clinton to discourage high-speed trading strategies that she says could destabilize markets.



Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.