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High-speed trading makes up 50% of TSE transactions

High-frequency traders make around half the transactions on the Tokyo Stock Exchange through a co-location service.

TOKYO -- High-frequency trading through a co-location service now makes up around half the activity on the Tokyo Stock Exchange, raising both hopes for a brisk market and fears of excessive volatility.

     The bourse's co-location service allows specialized traders and others to install high-frequency trading servers in the same Tokyo-area building that hosts the TSE's primary systems center. Minimizing the distance between exchange servers and trading servers is critical to the traders, who make a large number of automated trades milliseconds apart, gaining or losing as little as a few hundredths of a yen per second as share prices shift.

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