The impact of rapidly changing technology on financial markets has been a concern of the Quantitative Finance program at the Stevens Institute of Technology since its inception.
So it made perfect sense for CNBC to ask the program’s director, Dr. George Calhoun, for help reading the tea leaves on how technology’s influence on business might exert itself going forward.
The show’s hosts asked Calhoun, a professor in the Howe School of Technology Management, about the role of algorithms in high-speed trading.
Algorithms, Calhoun explained, perform the mechanical function of what people did for so long, in terms of trade execution. The difference, of course, is an algorithm can execute trades in the blink of an eye. This sort of high-speed activity has changed trading strategies and created concern from regulators and others, who are hesitant about the impact such technology can have.
“It’s technology and the speed that creates all the risks that we are now coping with,” Calhoun told the hosts.