Has High Frequency Trading Ruined The Stock Market For The Rest Of Us?

20100127084812clinical-data-operation-landing-430x3236According to San Francisco Chronicle’s Tim Parker, If you are an investor, high-frequency trading (HFT) is a part of your life even if you don’t know it. You have likely purchased shares offered by a computer or sold shares purchased and then instantly sold by another computer. HFT is controversial. Traders disagree with each other and studies contradict other studies, but regardless of the opinions, what is most important is how HFT affects your money.

Top Investment Trends For 2013: We go over a few investment trends for you to think about for 2013.

What Is HFT?
HFT is a broader term for various trading strategies that involve buying and selling financial products at extremely high speeds. Computers can identify market patterns and buy or sell these products in a matter of milliseconds based on algorithms or “algos.”

One strategy is to serve as a market maker where the HFT firm provides products on both the buy and sell sides. By purchasing at the bid price and selling at the ask price, high-frequency traders can make profits of a penny or less per share. This translates to big profits when multiplied over millions of shares.

Read More 

Advertisements
This entry was posted in Business, Dark Pools, Finance, High Frequency Trading, U.S. Economy and tagged , , , , , . Bookmark the permalink.

One Response to Has High Frequency Trading Ruined The Stock Market For The Rest Of Us?

  1. Pingback: Has High Frequency Trading Ruined The Stock Market For The Rest Of Us?

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s