Electronic trading systems operated by computers account for nearly half of the contracts traded on a daily basis at the New York Mercantile Exchange, according to Craig Donohue, CEO CME Group, which owns the NYMEX. Donohue said about 45% of the NYMEX's daily volume comes courtesy of computers with a smaller percentage than that coming from high-frequency trading systems.
Critics have claimed high-frequency trading programs, which can buy and sell thousands of shares of stock or futures contracts in a matter of seconds, have contributed to an increase in market volatility. Following the May 6, 2010 ''flash crash,'' critics have amplified their assessments regarding the risks of computer-driven trading.
At 45% of total trade, computer-driven programs would have accounted for roughly 189,000 crude oil contracts changing hands on the NYMEX on Wednesday, or the equivalent of 189 million barrels of oil, Reuters reported. Put another, way that is more than double the amount of oil consumed on a global basis every day.
The Commodities Futures Trading Commission (CFTC) recently said it is exploring ways to enhances its regulation and supervision of algorithm trading in the futures markets, Reuters reported.