Bank of America, the New Darling for High Frequency Traders

Golden Networking’s High Frequency Trading Leaders Forum 2011 Singapore (, conference that will provide the most up-to-date overview of cutting-edge developments and insights to build a competitive advantage in high-frequency trading to investors and traders, will take place at the SGX Centre.

According to Lori Spechler of CNBC Market Insider, Bank of America has replaced Citigroup as the new darling of high frequency traders. Currently trading at 6.62 per share, Bank of America has the low price and high-quality name that high frequency traders look for.

HFT Leaders Forum

Citigroup was the former favorite stock of this trading strategy before its reverse split in May 2011, and at that time there was speculation about which stock would take its place.

Wonder no more, say traders. “Bank of America has replaced Citigroup as the darling of the high frequency crowd,” says Steve Sosnick, Timber Hill Equity Risk Manager. “It’s got all of the characteristics, low price and lots of liquidity.” And of course, a big float—over ten billion shares are available for trading.

Tim Biggam, Trading Block Strategist agrees. “Bank of America volume has picked up”, he says. Traders target the stock he says looking for “rebates for providing liquidity”. The rebates he is referring to are fractions of cents paid by exchanges to traders that do volume. And traders like Bank of America because it is a relatively high quality name with a single-digit handle. That combination translates to a higher percentage return on trading capital.

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