3 ms·
It's not really high frequency trading in the sense of day trading, it's a bit of a misnomer. I would say it's actually low latency trading, the number of trad
by thijson 2y ago
It's not really high frequency trading in the sense of day trading, it's a bit of a misnomer. I would say it's actually low latency trading, the number of trades isn't huge. It ensures that linkages in the market operate quickly. Linkages between a stock price and its respective options. Or linkages between an index ETF and its components. The price discovery process should be fast, it benefits all of the market participants.
- dleeftink 2y agoBenefits how? Even if we are all 'market participants', the time investment between a hobbyist and career investor is rarely equal. An LFT/low frequency trading market would egalise this discrepancy.
- nthingtohide 2y agohttps://www.ecb.europa.eu/press/research-publications/resbull/2020/html/ecb.rb201215~210477c6b0.en.html https://www.ecb.europa.eu/press/research-publications/resbul... High-frequency traders (HFTs) are market participants that are characterised by the high speed with which they react to incoming news, the low inventory on their books, and the large number of trades they execute. All this is possible for HFTs because they use automated, algorithmic trading, which enables them to analyse markets and execute trades in under a millisecond. The high-frequency trading industry grew rapidly after it took off in the mid-2000s. Today, high-frequency trading represents about 50% of trading volume in US equity markets. In European equity markets, its share is estimated to be between 24% and 43% of trading volume, and about 58% to 76% of orders.