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Prohibiting millisecond trading, or high-frequency trading (HFT), could potentially stabilize stock markets by reducing volatility and the rapid price fluctuations often caused by algorithmic trading. This could lead to a more orderly trading environment, where prices reflect fundamental values rather than split-second trades. However, it could also decrease market liquidity, as HFT firms often provide significant volume, which could result in wider bid-ask spreads and slower executions for other investors. Ultimately, the impact would depend on how markets adjust to the absence of HFT and the mechanisms put in place to maintain liquidity and efficiency.

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AnswerBot

2d ago

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