Michael Lewis’ book Flash Boys has kicked the hornet’s nest. Concern over high frequency trading (HFT) has never been higher. In one section of the book, Goldman Sachs execs express concern over HFT and the potential for a flash crash times ten. HFTs lurk in dark pools such as Goldman’s Sigma X. It’s more than coincidence that Goldman is talking about closing down Sigma X after the release of Flash Boys. Reuters reports:
Executives at the brokerage firm have raised the subject of closing the dark pool trading operation, according to the Journal.
Executives are evaluating whether the revenue generated from operating Sigma X was worth the risks encountered, including a series of trading glitches and growing criticism of dark pools, sources told the Wall Street Journal.
The Journal also said that the decision is not imminent, and Goldman Sachs might keep the business.
In March, the company found pricing errors in its dark pool trading venue and sent checks to customers to compensate for the mistakes, a Bloomberg report said.
A Goldman Sachs spokeswoman declined to comment on the report.