High Frequency Trading

High Frequency Trading

Refers to computerized trading using proprietary algorithms. There are two types high frequency trading. Execution trading is when an order (often a large order) is executed via a computerized algorithm. The program is designed to get the best possible price. It may split the order into smaller pieces and execute at different times. The second type of high frequency trading is not executing a set order but looking for small trading opportunities in the market. It is estimated that 50 percent of stock trading volume in the U.S. is currently being driven by computer-backed high frequency trading. Also known as algo or algortihmic trading.
References in periodicals archive ?
Though High Frequency Trading (HFT) sometimes has a potential to create an alpha - the financnial world's word for high-end returns - as managers exploit opportunities provided by volatility, it has, at the same time, the potential to disrupt the market - just as it did May 2010, when the 'Flash Crash' hit the market.
At the heart of the lawsuit, filed by New York Attorney General Eric Schneiderman, is the murky world of high frequency trading.
It is estimated that 70 per cent of trading in the US and 40 per cent in Europe involve this high frequency trading.
The Securities and Exchange Commission (SEC) is looking to enact new regulations to curb system-abusing high frequency trading (HFT) in U.
Summary: The Securities and Exchange Commission (SEC) is looking to enact new regulations to curb system-abusing high frequency trading (HFT) in U.
com)-- A huge majority of respondents say high frequency trading on Wall Street should be outlawed, according to a new poll just released by Money Examiners.
The law will also ban some forms of commodity trading and activities such as high frequency trading.
The faster connectivity enables Strike to achieve the highest density and lowest port-to-port latency Ethernet performance, enabling the fastest response times for high frequency trading applications.
org/61eCa0mPb (describing the emergence of high frequency trading as "the lovechild of 12 years of SEC rulemaking and advances in trading technology.
Instead, the majority of trades are now dominated by traders utilizing powerful computer algorithms in a practice known as high frequency trading (HFT).
FINRA will continue to aggressively pursue disciplinary action for illegal conduct, including abusive momentum ignition strategies and high frequency trading activity that inappropriately undermines legitimate trading activity, in addition to related supervisory failures.
Thanks to Zerohedge, came across this very interesting and disturbing paper on High Frequency Trading.

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