Trading Glitch Shows Flaws in Electronic Trading (Newsday)

Incident brings calls for increased regulation of electronic trading

Dozens of stocks posted big swings in early trading Wednesday as the result of a technology problem at market maker Knight Capital Group, bringing renewed calls for increased regulation of electronic trading, Newsday reports. Wednesday’s problems are only the latest in a series of glitches related to electronic trading, including the problems on Facebook’s initial day of trading in May and the May 2010 “flash crash,” in which the Dow dropped 600 points in 10 minutes.

Critics say the problems with electronic trading are eroding investors’ confidence in the U.S. stock market.

The wild trading Wednesday came as the Securities and Exchange Commission put out rules requiring a single consolidated feed of stock trades, a response to the 2010 flash crash.

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