Question

Explain Flash Trading and Dark Pools. Do you think they are fair? Why or Why Not? How should the government regulate them?

Explain the Role of Fannie and Freddie in the housing market.

Answer 1

Flash Trading- Some stock exchanges offer this computerized trading practice, in which they use very high speed software or technology to view orders for other market participant (buyers and sellers). Flash trading gives advantage to some traders as they can predict the price and can analyse market setiments and take a good profit by placing the best bid/ask order. It is also called Step-up-order.

It should not be legal as some traders benefit from it. Government should take a proper control on this.

Dark Pool- Is a pool trade executed by Institutional investors on a private exchange that is not available to public. Big Giants/ Investors/traders do these Pool trading that is also called bulk trading. It is legal.

FANNIE MAE AND FREDDIE MAC was created to provide liquidity, stability and affordability to the housing market or housing market by the congress .and they provides liquidity to some of the largest banks or instituions to loans for housing.