NO.PZ2021101401000032
问题如下：
Wang assesses the risks posed by QuickTrade’s electronic trading strategies on the market. He is worried that these risks might prompt more regulatory actions.
Wang suggests that these risks can be minimized by altering the market structure, and that these structural changes can retain QuickTrade’s primary competitive edge, which is trading faster than its rivals.
Which market structural change related to electronic trading systems aligns best with Wang’s suggestion?
选项：
A.Delaying order processing by random intervals
Using trade halts when prices fluctuate too rapidly
Running call markets once a second or more frequently instead of continuous trading
解释：
B is correct.
To reduce the systemic risks associated with fast trading, some exchanges have adopted trade halts when prices move too quickly. These rules stop trading when excess demand for liquidity occurs. They also prevent the extreme price changes that can occur in electronic markets when market orders arrive and no liquidity is present. QuickTrade’s competitive advantage will be maintained despite exchange trading halts because the company will be free to trade faster than its competitors once trading resumes. Therefore, exchanges using trade halts to stop trading is the risk reduction strategy that most likely maintains QuickTrade’s competitive advantage and is consistent with Wang’s claim that risks can be reduced by changing the structure of the market.
A is incorrect because delaying order processing by random intervals reduces the benefits of high-frequency traders being faster than their competitors and investing in speed. Therefore, delaying order processing by random intervals does not maintain QuickTrade’s primary competitive advantage, which is trading faster than competitors, because that advantage will be reduced.
C is incorrect because slowing markets by running call markets once a second or more often instead of trading continuously diminishes the benefits of high-frequency traders being faster than their competitors and investing in speed. Therefore, slowing markets once a second or more often instead of trading continuously does not maintain QuickTrade’s primary competitive advantage, which is trading faster than competitors, because that advantage will be reduced.
