The flash crash: a review

Abstract

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Survey of EU ethical guidelines for commercial AI: case studies in financial services

“…These automated algorithms will compete and trade against each other resulting in increasingly unpredictable market behavior. There has been speculation in recent years regarding the role of automated trading programs on adverse market events such as flash crashes [30] or speculative bubbles [31]. Though research from Kirilenko et al in the Journal of Finance has indicated that HFTs did not initiate the well-known US May 6, 2010 flash crash [32], the sell-off event was nevertheless exacerbated by certain automated trading executions operating in an unforeseen way: "Based on our analysis, we believe that High Frequency Traders exhibit trading patterns inconsistent with the traditional definition of market making.…”

The Impact of Automated Trading Systems on Financial Market Stability

“…Flash Crash has raised a number of important issues related to the structure and stability of the USA financial markets. Many experts (Kirilenko, Kyle, Samadi, & Tuzun, T., 2011;Akansu, 2017;Braun, Fiegen, Wagner, Krause, & Guhr, 2018) attributed instability to excessive use of computers and high-frequency trading systems. However, the key question is whether these systems really made the market fragile and unstable.…”