High frequency trading uses algorithms to conduct trades in fractions of a second . Irrespective of how the popularity of high frequency trading changes in the future , this need for speed will continue to drive a technological arms race where the weapons of choice include new types of computer circuits hard-wired with dedicated trading algorithms ; new tunnels blasted through mountains to ensure more direct optic fiber connections ; new cables being laid in straighter paths across the Atlantic seabed ; and even new networks of microwave towers to profit from the speed of electromagnetic signals through air . The algorithm is designed so that the price will be adjusted as soon as it becomes apparent there are large swings between two prices, and then adjust again when those swings return back into balance. These `` sub-second tsunamis '' go unnoticed and are over in the blink of an eye . Governments need a financial `` air traffic control system '' to manage this , says Johnson .
High frequency trading uses algorithms to conduct trades in fractions of a second . The algorithm is designed so that the price will be adjusted as soon as it becomes apparent there are large swings between two prices, and then adjust again when those swings return back into balance. These `` sub-second tsunamis '' go unnoticed and are over in the blink of an eye . Governments need a financial `` air traffic control system '' to manage this , says Johnson .