Handel algorytmiczny – zagadnienia prawne
Algorithmic trading – the legal issues

Author(s): Jakub Piwowarczyk
Subject(s): Law, Constitution, Jurisprudence
Published by: Wydawnictwo Uniwersytetu Śląskiego
Keywords: Bitcoin; cryptocurrency; taxes, property rights; new technologies;FinTech;
Summary/Abstract: The main topic undertaken in the present article is the subject of algorithmic trading. Thus, the author is under an obligation to begin with a short outline of the history of stock exchange and financial markets’ computerization, paying most attention to the historical milestones like introducing DOT and SuperDOT to the New York Stock Exchange. Next, the author presents the controversies accompanying the attempts at defining the term in question – what algorithmic trading is in the strict sense and what are other iterations of the subject, such as high frequency trading, black box trading, or dark/black pools. It is also necessary to mention the emergence of a certain “arms race” between financial institutions and other agents involved in those markets that was caused by introduction of such technologies; and the consequence of this kind of escalation, namely, creation of increasingly complicated and independent algorithms.Latter part of the article is concerned with a more detailed presentation of the most common iteration of algorithmic trading – the high frequency trading, especially the dangers associated with assigning new roles to created algorithms, whose evolution fulfills preexisting market niches, while simultaneously creating spaces for new ones (e.g. quote staffing).Finally, the author focuses on the issue that involves the largest group of people (those completely uninvolved with the financial market as well), that is, the influence that the emergence of the algorithmic trading has had on the financial markets in general, based on the situation that occurred in 2010 – the “Flash Crash”, and the contrast occurring between the technological capabilities of the investors and the contemporary law, which caused a considerable obstacle in administrative reaction.

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