The National Stock Exchange (NSE) states that the reply by journalists Debashis Basu and Sucheta Dalal do not provide conclusive proof of wrongdoing in the exchange, reports the Business Standard. This was NSE's reply to the affidavit by journalists working for Moneylife in its defamation suit in the Bombay High Court. Previously, the NSE had filed a Rs 100 crore defamation case against Moneylife magazine in July, a month after Moneylife published an article on algorithmic trading based on a whistleblower's report. The report detailed how certain companies, which were registered for high-frequency trading (HFT) were profiting illegally with the help of the exchange’s insiders. Note that, the same month, the Bombay High Court said that the National Stock Exchange (NSE) cannot use defamation to gag the press. The court specifically asked the NSE how it could treat it as a defamation case when the agency had not responded to queries made by the press prior to publishing. HFT and how it works: HFT is a way of algorithmic trading where automated tools rapidly trade securities. High frequency traders trade on very small profit margins in high volumes in fractions of seconds. Overall, the faster the trader gets the prices, the more likely they are to make a better profit. Usually, this boils down to the latency to the server and the efficiency of the trading algorithm. Getting the info even a few milliseconds earlier than anyone else, can result in massive profits. In this case, the whistleblower, whose entire letter can…
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