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Benedicte Gravrand, Opalesque London:
Participants at the Mankoff Company roundtable - on automated, high frequency and algorithmic trading - last month in London addressed issues of developments, latency and dark pools among other things. Here are some of the points that transpired from the evening.
What is HFT?
High-frequency trading (HFT) refers to the buying and selling of stocks at extremely fast speeds with the help of powerful computers, using complex algorithms. Algorithmic trading is used by pension funds, mutual funds, and other buy-side institutional traders. Sell-side traders, such as market makers and some hedge funds, provide liquidity to the market, generating and executing orders automatically.
HFT is an intra-day technique of capturing an edge, said Anthony Tassone, VP at Algorithmic Trading Solutions (RTS Realtime Systems). "Your edge determines how frequent you are. Trades can be done in fractions of seconds."
The gap time between efficiency and randomness is protected by the strength of financial theory, said Alain Ruttiens, principal at Sofis Capital.
But one thing that should be taken into account is the trading costs to frequent trades, added David Beddington, MP at Dacharan Capital LLP.
HFT is a natural outgrowth of computing (on automated exchanges) and does from 100 ...................... To view our full article Click here
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