You could be forgiven for thinking otherwise, but the majority of news events have a short lifespan. As witnessed recently, there are notable exceptions. But even the copious amount of media attention given to the late Margaret Thatcher would have to go some way to outrun that being afforded to the controversial topic of high frequency trading (HFT).
To the uninitiated, HFT is the use of highly sophisticated technologies and algorithms to trade securities at speeds so fast it makes Usain Bolt look like Eric Pickles doing the 100 meters. Unlike more traditional forms of trading on financial markets, investment positions in HFT are held for as little as a fraction of a second, all in a bid to buy and sell stocks with minimum loss of its original value. Since the now infamous 2010 flash crash, an event that saw the Dow drop 900 points only to recover minutes later, the interest in HFT has grown such that it has been catapulted from the mainstay conversation of monosyllabic quantitative trading geeks in the Square Mile, to the bright lights of Hollywood.
Yes, believe it or not, like the Iron Lady herself, HFT has hit the big screen with Ghost Exchange, a documentary portraying the growing influence of technology on financial markets. So just how has this form of market making risen from minor industry trade news to potential blockbuster of the big screen and more importantly, how can the communications industry take advantage of its star turn?
Well, in the same way that Thatcher was able to divide public opinion, the debate around whether HFT is a good or bad thing for markets is exactly the same. Indeed, its divisive nature provides almost unlimited communications opportunities for market participants in the financial sector. For the PR firms representing them, the key to getting their clients in on this debate, whether they are for or against, is to adopt a communications strategy flexible enough to anticipate what will spark the next debate on HFT.
There are many different topics that link into HFT, from how the practice is regulated to new reports such as the one released by the Government last month, proposing a tax on profits. It is also important to identify an angle that not only drives new interest around HFT, but also the client’s specific service, ensuring they have credibility when they take their story to market.
As long as there is a new report, mini flash crash or regulatory uncertainty, the topic of HFT is unlikely to go away. Those PR agencies with a communications strategy able to react fastest to the latest developments sparking fresh debate will be the ones that successfully land top-tier coverage for clients in the financial sector.
One thing is for certain, regardless of the approach adopted by agencies and their clients, HFT is a topic that is certainly not for turning.
Tim Focas is a financial technology specialist at Aspectus PR.