Questão 506730

Analyze the passage on algorithmic financial trading and market microstructure:

'High-Frequency Trading (HFT) algorithms execute trades at sub-millisecond latencies, utilizing complex quantitative strategies to exploit micro-arbitrage opportunities across fragmented exchanges. While market makers argue that algorithmic trading deepens liquidity and compresses bid-ask spreads, financial regulators emphasize that algorithmic synchronization can trigger extreme tail-risk phenomena, such as flash crashes, by instantaneously withdrawing liquidity during market stress.'

Judge the following statements regarding the passage:

I. HFT algorithms can trigger severe flash crashes by rapidly retracting liquidity when markets experience stress.

II. Proponents of algorithmic market makers argue that HFT contributes to tighter bid-ask spreads and enhanced liquidity.

III. Financial regulators have demonstrated that sub-millisecond trading completely insulates markets from systemic volatility.

Which item(s) is/are CORRECT?