Automatic trading brings growing risks to U.S. bond market -TMPG

April 9, 2015 4:34 PM

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NEW YORK, April 9 (Reuters) - The increasing role of computerized trading in the U.S. bond market has boosted the risk to U.S. Treasuries trade, potentially causing more turmoil like the wild price swing that erupted on Oct. 15, according to a paper from a bond industry group released on Thursday.

Supporters see automated trading, in particular high frequency trading which uses complex models to almost instantaneously buy and sell huge volumes of bonds and other securities, as fostering liquidity and bringing down trading costs.

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