Flying by the seat of their pants:What can High Frequency Trading learn from aviation?

Abstract

As we build increasingly large scale systems (and systems of systems), the level of complexity is also rising. We still expect people to intervene when things go wrong, however, and to diagnose and fix the problems. Aviation has a history of developing systems with a very good safety record. Domains such as high frequency trading (HFT), however, have a much more chequered history. We note that there are several parallels that can be drawn between aviation and HFT. We highlight the ironies of automation that apply to HFT, before going on to identify several lessons that have been used to improve safety in aviation and show how they can be applied to increase the resilience of HFT in particular