Athena price manipulation fine highlights risks of HFT
Penalty of $1 million for HFT firm Athena Capital Research emphasises how trading algorithms can be used for market-rigging even by small companies
New York high-frequency trading firm Athena Capital Research manipulated the prices of stocks on the Nasdaq exchange, according to a decision by the Securities and Exchange Commission issued last night, which also highlights the risks of malpractice involving powerful HFT algorithms.
The firm's trading algorithm was designed to follow a (legal) strategy aimed at exploiting imbalances between buy and sell orders in the closing minutes of each trading day. Imbalances are announced 10 minutes
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