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