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Declawing Speed Traders Is Goal of Stock Market Revamp Proposal

The only way to mitigate the negative effects of high-speed traders is to redesign a key part of how financial markets operate, according to the University of Chicago’s Eric Budish.

Trading is now effectively non-stop, with transactions measured in millionths of a second. Budish, an associate professor of economics at the Booth School of Business, proposes to instead segment trading into thousands of auctions throughout the day, preventing the quickest firms from jumping ahead of slower ones. He argued his case last week to the Commodity Futures Trading Commission, the main U.S. derivatives regulator.