Issues and Future Trends

Question 1

What is HFT ?

Answer 1

• Orders are generated by computers running algotithmic trading programs
• computers are located close to stock exchanges
• Large volume of trades entered and cancelled in very short time
• intent is to return to flat position at the end of the day

Question 2

What is the goal of HFT ?

Answer 2

• Generate profits with the smallest base of capital possible
• Typical strat: placing and order in front of a large order to make the market move on that position (frontrunning)