High Frequency Trading Explained.


New York stock exchange, the largest and most liquid securities market in the world, Here is where a good portion of the world largest companies have their stocks traded amongst millions of investors worldwide ranging from small individual investors, to major banks and financial institutions and even entire countries. This is not the only exchange, there are hundreds of similar exchanges around the world that work to raise capital for productive corporations that will design and build the products of the future. Classic imagery of load bombastic traders in bright uniforms tend to be the images that come to mind when we think of these kinds of exchanges, but the reality today is that most of the action on wall street looks like this.

The age of the automated trading machines is upon us, most trading today is happening to, from and between computers that all have very clever programs to consistently and reliably invest into the stock market better than a human could. These computer programs come in all shapes and sizes but the most controversial of all of these are high frequency trading algorithms.

Discord – https://discord.gg/nZuCJRY

References –

Brogaard, J., Hendershott, T. and Riordan, R., 2014. High-frequency trading and price discovery. The Review of Financial Studies, 27

Kirilenko, A., Kyle, A.S., Samadi, M. and Tuzun, T., 2017. The flash crash: High‐frequency trading in an electronic market. The Journal of Finance

Brogaard, J., 2010. High frequency trading and its impact on market quality. Northwestern University Kellogg School of Management Working Paper

Carrion, A., 2013. Very fast money: High-frequency trading on the NASDAQ. Journal of Financial Markets,

Golub, A., Keane, J. and Poon, S.H., 2012. High frequency trading and mini flash crashes

Paddrik, M., Hayes, R., Todd, A., Yang, S., Beling, P. and Scherer, W., 2012, March. An agent based model of the E-Mini S&P 500 applied to Flash Crash analysis. In 2012 IEEE Conference on Computational Intelligence for Financial Engineering & Economics

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