This article was originally published at AllAboutAlpha.com, and is reproduced here with the author's permission.   Germany’s Bundestag voted Thursday, February 28, approving a bill aimed at limiting the abuses of high-frequency trading. If you’re a pessimist, you are even now muttering, “we’re from the government, and we’re here to help.” If you’re an optimist, [and one who lives, invests, and seeks alpha for the most part outside of Germany] you may be happy to have Germany undertake an experiment in this respect. Other countries and...

This article was originally published at AllAboutAlpha.com, and is reproduced here with the author's permission.   A recent working paper from the Bank of England reports on efforts to understand the rise of high-frequency trading and its impact on equity markets. I think it fair to say that the study fails to get any firm grasp of its subject matter, going “about it and about but evermore,” as poet Omar Khayyam wrote. The authors leave the subject by the same ambivalent door they used on the way in. Nonetheless, the trip is instructional, if only of the...

The U.K.’s Foresight Project, part of the Department for Business Innovation & Skills (BIS) has issued a white paper on “The Future of Computer Trading in Financial Markets” that discusses both high frequency trading and algorithmic trading, both of which (as the Foreword says with a bit of Brit understatement), have “attracted considerable controversy and opposition.” The message of the Foresight Project on HFT and AT is mixed. On the one hand, (as the government’s chief science adviser, Sir John Beddington puts it in a Foreword) certain...