D Börse targets “stupid algos”

In response to a surge in the number of orders streaming into its trading system amid the spread of high-frequency trading, Deutsche Börse is set to issue punitive charges to traders if they send too many failed orders into the exchange.

These unsuccessful orders, often cancelled or revised at the last minute as sentiment changes, result in what they have dubbed as “stupid algos”—such trading uses computer algorithms to generate buy or sell orders in reaction to market data and statistics, and uses them in pursuit of creating a pre-determined trading strategy which is now being skewed by these faulty “algos”.

Read more about how exchanges are attempting to maintain the integrity of the system.

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