High frequency trading

(HFT).

Trading activities using sophisticated technological tools and computer algorithms that generate a large number of daily trades at very fast speeds.

Typically at the end of the day there is no open position in the market.

Characteristics attributed to HFT are:

1. Extraordinarily high speed using sophisticated computer programs for generating, routing, and executing orders;
2. Use of co-location services and individual data feeds offered by exchanges and others to minimize network and other types of time delays;
3. Very short time-frames for establishing and liquidating positions;
4. The submission of numerous orders that are cancelled shortly after submission;
5. Ending the trading day in as flat a position as possible.

See also

• Algorithmic trading
• Computer based trading
• Day trading
• Investment horizon