High-Frequency Follies

Forbes reported that, a dark vulture hovers over markets, ready to swoop down and cause major damage to your portfolio. I’m speaking of high-frequency trading, or HFT, as it’s called. Dozens of firms, made up of scientists, information technology ­developers and math whizzes, have armed themselves with the fastest computers and most sophisticated algorithms out there. HFT firms execute orders with stunning speed, often as fast as four milli­seconds. While they represent only about 2% of the 20,000 operating brokerage firms, they ­account for nearly two-thirds of all volume on the New York Stock ­Exchange and some other bourses.

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