High-Frequency Trading and the AMF

Admittedly, as a retail investor, you may not feel directly affected by what is known as high-frequency trading. However, it is important to recognize that this practice is very much a reality today, and the AMF is actively working to combat it. So, why address this topic? Quite simply, because even if you do not engage in high-frequency trading yourself, you are still impacted; you are not playing with the same advantages as institutional investors in the markets.

What is high-frequency trading?

It is quite simply the ability of a trading robot to execute thousands of orders per second on the financial markets. This opens the door to price manipulation, allowing for the potential to gain thousands of euros every single second.

What is the AMF’s position?

The AMF (Autorité des Marchés Financiers) is not at ease with high-frequency trading. Indeed, it is becoming increasingly difficult for the regulator to distinguish “traditional” trading activities from those aimed at market manipulation. This is why it is lobbying for legislation to regulate this practice. After imposing heavy fines (exceeding 5 million euros) on Euronext, various companies, and certain traders, the industry is beginning to evolve by setting a maximum frequency for market interventions. Some companies offer you access to these high-risk markets and the ability to open a free automated trading account. Keep in mind that these investments carry significant risk, and personally, I would not venture into them.