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Deutsche Bank WARNING: Fears ‘Robot Traders Will Trigger GLOBAL CRASH’ on THURSDAY


  • Deutsche Bank WARNING: Fears ‘Robot Traders Will Trigger GLOBAL CRASH’ on THURSDAY
    EXCLUSIVE: THE FUTURE of Deutsche Bank could be decided on Thursday when bosses release its third quarter results, warn experts.

    The news could spark a sell-off contagion that could lead to another global financialmeltdown and a bail out by Angela Merkel’s government despite her opposition to German state intervention.

    Analysts are warning that ultra high frequency trades triggered by machines could lead to a perfect storm and could have serious knock-on effects for other banks exposed to the firm’s risky assets book.

    Germany’s largest lender has been hit by unprecedented sell-offs losing 52 per cent of its value in just a year and is struggling to ward off its crisis. The bank has announced massive job cuts ahead of a £11.4billion fine from the US Justice Department. And it has been muted that up to 5,000 jobs could go in America alone. Now investors, including their biggest stakeholder Qatar, are said to be on edge as they get set to reveal their latest financial data.

    Sources say hedge funds are sharpening their claws to make a killing at any cost. Academic Dean at London Academy of Trading, Paddy Osborn,  said: “It’s the high tech hedge funds who will do it. “Those guys are putting in maybe 50,000 orders into the market every second and they get a very low trade to order ratio, maybe only 20 to 30 get executed in a second and then they all get cancelled and then they put another 50,000 in the next second, it’s not something a human being could do.

    “The orders are triggered by the movement in the price, so a lot of them are speculating in a trend following type strategy, so if the price starts to move in one direction they want to take a position in that direction.

    “It’s a simple strategy but it’s very, very fast, so if you trigger one order that pushes a price a bit low then that could trigger another and another and that’s what caused the flash crash in 2010, and I think it probably contributed to the one we saw last year as well after China spluttered a bit.

    “In the US only two per cent of institutions who are trading equities use algorithms but nearly three quarters of the volume is innovated by this two per cent of companies in terms of the number of trades.”

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October 26, 2016 - Posted by | Economics | , , , , , , , , ,

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