0:00:15hi my name is british punch reduce i'm an associate professor to finance
0:00:20and am also the unique faculty for the new set of
0:00:24i am century real estate research initiative
0:00:28well we started is initiative a few years back
0:00:32may need to address here
0:00:34in our economy which is
0:00:36getting scientific analysis of data on the illustrates sector
0:00:49when i started my phd in the early nineties
0:00:52training was mostly men and one where buyers and sellers have to get together at
0:00:57the physical place
0:00:58to transact
0:01:00just in a span of one decade trading has moved away from of rover based
0:01:06system to a completely automated system where buyers and sellers now interact in cyberspace
0:01:21so one consequence that has been of great interest to researchers is the ability of
0:01:27speech traders what used to take several minutes for trans acting now takes only milliseconds
0:01:36markets
0:01:37have tried to adopt
0:01:39different strategies to deal with this high frequency trading
0:01:44regulators are worried about some of those high frequency trading could actually result in destabilising
0:01:51market
0:01:52and therefore cause unintended consequences to the overall economy
0:01:57recent crises board in the united states as well as in india
0:02:03forced regulators to come up with creative solutions to slow down these high frequency traitors
0:02:18unlike the best on regulators who are interested in actually doing forced research before the
0:02:25implemented a solution
0:02:27the indian regulator to the securities and exchange board of india
0:02:31and actually going ahead and implemented a recognition tax
0:02:36on these high frequency trainers what the stock selsa's
0:02:39if a particular trader sense
0:02:42many orders
0:02:44and cancellations for one unit of trade
0:02:48then they have to be a higher free
0:02:50and this fee was meant
0:02:52to make it expensive
0:02:54for high frequency traitors to
0:02:56transact in the marketplace
0:02:58whether this fee actually resulted in any slow down or whether the slowdown actually resulted
0:03:04in any to durational market quality is something that only researchers can fine
0:03:10i along with a lot of mine from what university
0:03:14proposition about the structure what the we are undertaking the first study in india and
0:03:20actually the second study globally
0:03:22and look at the back of the simulated attacks
0:03:26on the market quality while the initial study which was done on the italian market
0:03:33came with the conclusion that slowing down high frequency treating was not actually a good
0:03:38idea
0:03:39the sense that
0:03:41it is actually presented an increase of treating cost and also more sent the market
0:03:46quality
0:03:48we in india or in a different situation
0:03:52the regulation actually chose imposed initially
0:03:56actually resulted in increase about the trading or increase of this high frequency trading which
0:04:01rose counterintuitive
0:04:03because the taxes meant to slow down
0:04:06the high frequency trading
0:04:07so what we are trying to do is
0:04:10the first
0:04:12present the back of high frequency trading on the indian markets
0:04:16the union markets
0:04:18i started seeing the adapted usage of algorithmic trading
0:04:24from almost zero percent three two three years back to now it's twenty percent
0:04:30well fine in the in the cache market and it's almost fifty percent of the
0:04:35derivatives market
0:04:36so clearly the
0:04:38the development of pleading is going towards more and more of these p traders but
0:04:45the we like it or not we have to accept that
0:04:48the question always really whether
0:04:51the regulation can help
0:04:55prevent crises like what we have seen before
0:04:58then in a very short period of time prices can form
0:05:02that would need without any new information
0:05:04that is the big question and had a whole lot of research
0:05:08would be able to address