CFTC Finds Increasing Use of Automated Orders for Futures Contracts but Little Impact on Long-Term Market Volatility

Automated trading is not confined to the equities markets. Futures traders also use automated ordering systems to place orders for futures contracts. The CFTC recently released a staff report summarizing the results of its study of whether and how automated orders for futures contracts have affected the futures markets. Focusing on long-term – rather than intra-day – impact, the CFTC analyzed six years of trade data for thirty of the most actively traded futures contracts in eight different categories of financial and physical commodities futures. This article analyzes the CFTC’s findings. See “Women in Derivatives Event Features Address by CFTC Chair Giancarlo and Panel Discussion on the Intersection of Technology and Regulation” (Jul. 12, 2018).

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