The Rise of Computerized High Frequency Trading: Use and Controversy

Over the last decade, there has been a dramatic shift in how securities are traded in the capital markets. Utilizing supercomputers and complex algorithms that pick up on breaking news, company/stock/economic information and price and volume movements, many institutions now make trades in a matter of microseconds, through a practice known as high frequency trading. Today, high frequency traders have virtually phased out the dinosaur floor-traders and average investors of the past. With the recent attempted robbery of one of these high frequency trading platforms from Goldman Sachs this past summer, this rise of the machines has become front page news, generating vast controversy and discourse over this largely secretive and ultra-lucrative practice. Because of this phenomenon, those of us on Main Street are faced with a variety of questions: What exactly is high frequency trading? How does it work? How long has this been going on for? Should it be banned or curtailed? What is the end-game, and how will this shape the future of securities trading and its regulation? This iBrief explores the answers to these questions

Resilience: Health in a New Key

This is the story of resilience, the remarkable capacity of individuals and communities to bounce back from adversity and even thrive in a world of turmoil and change. How we can begin to build on our strengths -- instead of becoming prisoners of our weaknesses -- is the subject of this issue brief

The Elementary Persuasive Letter: Two Cases Of Situated Competence, Strategy, And Agency

Research on persuasive writing by elementary children posits primarily a developmental perspective, claiming that elementary-age children can effectively argue through talk but not through writing. While this view is commonly held, this article presents counterevidence. Drawing on two cases of third and fourth grade children writing persuasive letters gathered during six-month naturalistic studies of literacy practices and social identities in contrastive communities (one urban, one suburban), these data challenge the developmental generalization by showing that children in these settings can write persuasively. Further, this work complicates understandings of children\u27s persuasive writing by showing how assignments and local cultures shape children\u27s writing. Evidence is developed through rich description of the case study settings and instructional tasks, a typology of the children\u27s persuasive strategies, and a critical discourse analysis of the children\u27s persuasive letters. This study suggests that children in both communities are capable of persuasive writing, although they enact different patterns of response, drawing on locally learned discourses. The settings, the hybridity of the persuasive letter as both argument and letter, and the children\u27s habitus may account for some of the differences in how the children address the tasks through ranges of centeredness and agentive strategies. Differing patterns of response suggest new frames for viewing and fostering children\u27s argumentative competence in a range of settings, including understandings of agency. The author encourages a research agenda that accounts for socially situated classroom and community practices, and argues for ongoing research and critique of the power and place of persuasive writing for children in a range of schools

Short-term interest rate futures

An abstract for this article is not availableInterest rate futures

Using financial futures in trading and risk management

The authors explain the features of an array of futures contracts and their basic pricing relationships and describe a few applications to show how investors and risk managers can use these contracts. Futures - and derivatives generally - allow economic agents to fine-tune the structure of their assets and liabilities to suit their risk preferences and market expectations. Futures are not a financing or investment vehicle per se, but a tool for transferring price risks associated with fluctuations in asset values. Some may use them to spread risk, others to take on risk. Financial futures (along with options) are best viewed as building blocks. Futures have facilitated the modern trend of separating conventional financial products into their basic components. They allow not only the reduction of transformation of investment risk but also the understanding and measurement of risk. The market for derivatives has grown enormously over the past decade. The value of exchange-traded eurodollar derivatives (futures and options) is equal to roughly 13 times the value of the underlying market. The volume of trading in financial futures now dwarfs the volume in traditional agricultural contracts. As emerging markets develop, given their inherently risky nature, expect financial futures to play a prominent role in risk management.Payment Systems&Infrastructure,Economic Theory&Research,International Terrorism&Counterterrorism,Banks&Banking Reform,Securities Markets Policy&Regulation,Commodities,Banks&Banking Reform,International Terrorism&Counterterrorism,Non Bank Financial Institutions,Economic Theory&Research

Regulating excessive speculation: commodity derivatives and the global food crisis

Evidence suggests that commodity derivatives speculation contributed to extraordinary patterns of grain price volatility that led to a global food crisis in 2007–11. People in countries throughout the world are increasingly dependent on international commodity markets for access to food. Almost everywhere, now, the value of food is determined by a single condensed symbol of its worth—its price. Persuaded of the need to ensure that this measure of value is not put at risk of distortion in the pursuit of financial profit, governments in the US and in the EU are now implementing new regulations designed to curb ‘excessive’ levels of speculation in derivative markets. Carrying out an analysis of these regulatory measures, the article demonstrates that both sets of reforms suffer from a critical limitation: They are predicated on an inaccurate understanding of how activity in commodity derivative markets can impact on underlying food prices. If the new regulations for commodity derivative markets are not up to the task, as this article argues that they are not, a more fundamental revision of global economic structures may be required if the basic needs of human beings are not to be subsumed to the interests of financial capital in the years to come