Wall Street

High-frequency trading (HFT) uses quantitative investment computer programs to hold short-term positions in equities, options, futures, ETFs, currencies, and all other financial instruments that possess electronic trading capability. (Some securities, like Credit Default Swaps, for example, cannot be traded electronically, and are incompatible with investment algorithms.) Aiming to capture just a fraction of a penny per share or currency unit on every trade, high-frequency traders move in and out of such short-term positions several times each day. Fractions of a penny accumulate fast to produce significantly positive results at the end of every day. “High-frequency trading” became a buzzword in 2009, when Goldman Sachs accusedRead More →