This week the Senate Ag Committee held a hearing looking at high frequency trading. The panel was looking to clarify how high speed traders affect agricultural futures markets and whether regulators have the capacity to keep up. National Farmers Union’s Vice President of programs, Chandler Goule says high frequency trading is the way of the future but needs to be monitored closely to make sure everyone is protected.
Goule says originally it was high frequency trading and spec trading that brought up the need for Dodd Frank legislation. He says although high frequency trading and futures markets operate differently, the high frequency still needs to be monitored so it doesn’t spill over into futures’ trading.
Goule says NFU has no official position on this type of commodity trading but want to make sure farmers and ranchers are protected and can use the futures markets as a risk management tool.