KUALA LUMPUR, April 5 — Trading of equities on Bursa will be a new ballgame once computer-driven ultra-high frequency trading is introduced, said Edgar Perez, author and former Citigroup vice president.
High frequency trading already makes up six per cent of traders on the Bursa derivatives market and the stock exchange operator is reported to be gearing up for the introduction of ultra-fast trading of equities.
High frequency trading or HFT uses technology-enabled speed in the order of milliseconds or microseconds to buy shares and then sell them at a profit almost immediately with an emphasis on low margins but high frequency .
It now makes up an estimated 50-60 per cent of trades in US and Europe and 30-40 per cent on Asian markets.
Perez, the author of the book “The Speed Traders, An Insider’s Look at the New High-Frequency Trading Phenomenon That is Transforming the Investing World”, said that HFT involves dealing with very liquid instruments with very small margins to make money.