2 ms·
Are high frequency traders not a thing? Where trades are made according to speed -- and lots of trades. How does this not impact the same system?
by s_dev 6y ago
Are high frequency traders not a thing? Where trades are made according to speed -- and lots of trades. How does this not impact the same system?
- blueblisters 6y agoHFT firms are apparently hooked up directly to the exchange. So they probably settle trades in real-time. The whole chain of retail to broker to clearinghouse is what creates the need of credit-collateral at every stage and create systemic risk if some players don't have the right risk control in place. At least that's what I have figured from a few hours of reading.
- dmurray 6y ago> So they probably settle trades in real-time. They do not. They settle trades in 2 business days like everyone else. Think about it: if you sell a share to a HFT, how could the HFT receive it immediately when you don't need to deliver it for two days? However there is a process called CNS (Continuous Net Settlement) which means you generally only have to settle the net of your trades each day.
- maest 6y agoHFT hold no overnight positions (with rare exceptions) so don't have to worry about settling.