The great stock market sell-off: have the robots run amok?

Chris Johns: Algorithmic trading has played a role in recent market volatility

Robot trading: when the dust settles the casualties will be revealed – with luck, just a few professional speculators, and owners of robots, who should have known better. Photograph: Michael Nagle/Bloomberg

Robot trading: when the dust settles the casualties will be revealed – with luck, just a few professional speculators, and owners of robots, who should have known better. Photograph: Michael Nagle/Bloomberg

Anyone curious about what a world run by robots might look like should take a glance at the current gyrations in stock markets. It might seem like old-fashioned market volatility, but the recent turbulence has new and worrying drivers.

During the great financial crisis we got used to jargon such as “collateralised debt obligations”, or CDOs, which referred to the weird financial instruments at the heart of an unsustainable boom in US property prices and hugely overextended (global) banks.

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