February 21, 2010
As we’ve described in our previous articles, High Frequency Trading (HFT) is the practice of using sophisticated computer algorithms to generate orders and submit those orders to electronic markets at high speed. Estimates vary, but it is generally agreed that high frequency trading accounts for between 50% and 80% of all volume traded on the US securities markets.
The SEC’s Position
The Securities and Exchange Commission (SEC) has been trying to come up with adequate...
February 16, 2010
High Frequency Trading systems have to be pretty bulletproof. They have to work day in and day out and operate without errors. Because if they don’t, they can very quickly generate substantial losses. All it takes is just one rogue line of code.
For this reason, high frequency trading desks have to be very careful about what exactly they implement and how they roll it out into the market.
Like any mission-critical application, the implementation of a high frequency trading system...
February 15, 2010
High Frequency Trading has been hitting the headlines more and more over recent months. Why? Because it involves huge sums of money and more than a little intrigue.
It first came to the attention of the public when an ex-Goldman Sachs trader was accused of stealing the firm’s proprietary code for an algorithmic trading system, a system that was able to generate multiple small profits by systematically trading electronic markets at lightning speed, in effect a goose that could...
February 13, 2010
Wall Street is changing. There are new forces at work, dark forces say some. It’s the rise of the High Frequency Trading (HFT) machines and the traders behind those machines have been reaping the benefits.
But is it at the expense of other investors? Is high frequency trading allowing the select few to manipulate the markets, however subtly?
It’s a controversial question, but one that is being asked more and more at higher and higher levels.
By submitting millions of...
February 11, 2010
High Frequency Trading (HFT) is something that has been causing a lot of controversy recently, but what exactly is it and why is being talked about so much?
The purpose of this blog is to provide a guide to High Frequency Trading and algorithmic trading for beginners. We'll talk about algo trading (i.e. using computer algorithms to execute orders) in future articles, but right now we're going to focus on high frequency trading.
So what is HFT? Well, there doesn't seem to be any one clear...