“In normal market conditions, I do not think high-frequency trading have a direct negative impact on volatility. During stressful situations, studies show that it may be the case,” says investigator Niklas Johansson to public radio SR.
What Financial Supervisory Authority has looked at is high-frequency trading, where very sophisticated computers are used to do a large number of trades, sometimes for only a fraction of a second.
But this type of trading is of great concern among market participants. The Financial Supervisory Authority has sent out a questionnaire to a number of major banks and securities companies and also to major investors such as pension funds. Among the respondents is there a real concern that high-frequency trading contributes to an unhealthy trade, that stock prices are manipulated in a harmful way.