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Technology Stocks : Semi Equipment Analysis

SOXX 330.35

+0.5%

4:00 PM EST

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To: sixty2nds who wrote (27459)	12/15/2005 12:08:34 PM
From: Donald Wennerstrom	Read Replies (2) of 95707

The use of algorithmic trading looks like it will continue to thrive and increase. Another example of how things change through the use of computers. Upside/Downside of Algorithmic Trading Brokerage firms are providing algorithmic trading systems to institutional investor and hedge fund clients as an easy way to slice large block orders and then execute the resultant smaller trades on an automated basis throughout the day. With low commissions of $0.01 a share or less, growth has been significant, with some estimating that these systems now account for 25% of all equity trades. "In the case of these Whip Stocks though, algorithms, particularly the less sophisticated ones, are chasing each other and the market, forcing exaggerated movements up and down the price ladder," said Mr. Saluzzi. "There are also signs that day traders and other, more advanced predatory algorithmic systems have learned to track and take advantage of these abnormal price movements, further exaggerating the Whip Effect.">> Don

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