High Frequency Trading.ppt

Monash University English language Centre ASSET ASSET A 22 Feb 2012 High Frequency Trading Of Stock Market ● Stock market public entity; trading stocks and derivatives ● Algorithms trading economic platform; without human intervention; used by pension funds, mutual funds and buy side; divide large trades into several smaller trades ● HFT: High Frequency Trading extremely fast: millisecond; use complex algorithms; HFT firms represent 2% ;20,000 firms operating; 73% of all equity trading volume Some words How HFT is dominating the market? Disadvantages of HFT ● Distort markets. high-speed traders exploit a costly technological advantage; cost $250 millions; suck profits ● Hurt the smaller investors. “front-running” reduces returns to big funds’ beneficiaries and pensioners ● Cause May’s ‘ flash crash’. HFT has the potential to generate errors and losses at a speed and magnitude far greater THANK YOU！