ALL >> Computers >> View Article
High Frequency Trading And The Trading Computer

Did you realize that by some estimates so called High Frequency Trading (HFT) makes up 70% of the daily volume of the US market for stocks? In fact, the trading computer and HFT is blamed for the flash crash of 2010. The SEC ordered steps to prevent future flash crashes like that one, so clearly the SEC see HFT as a risk to the structure of electronic trading. Do you believe the game is rigged and there is no way to make money trading stocks? Well that is just not true.
In the early days of the markets (early 1800s until the 1960s), before the trading computer, all orders were handled in an open outcry and/or speicalist system and processed via pencil and paper. A customer wanting to buy a stock would call his broker. The broker would then call down to a trading room who in turn would call a dealer or exchange to execute the order. The process could take 5 to 10 minutes or even longer! By the time the customer got his order filled, the execution many times was very different from what he expected. Back in these days it was not unusual to have several middle men take a piece. Even in the period just before the ...
... internet, brokerage firms could take minutes to execute a market order and so called market makers could literally skim fractions of a dollars like Vegas takes a vig.
Once the internet took off and fractions were eliminated, pricing information became more transparent and spreads between bids and asks tightened up substantially. Online brokerage firms sprang up and order executions were in seconds. The invention of the high speed Trading Computer was an absolute must for traders. Commissions dropped to nearly zero and 90% of market makers went looking for a new job. I know because I was a stock broker during that period; the last half of the 1990s and early 2000’s.
Essentially the internet and the trading computer have cut the vig to zero! Price execution is no measured in milliseconds. So where do HF traders come into the picture? They are the new market makers. In fact their algorithms actually help execution instead of hurt it. So is the market rigged? Compare to yesteryear the market is much more transparent than it used to be. Did HF traders cause the flash crash? No the NYSE with their lack of oversight caused it.
For more information about Trading Computer and Multiple Monitors; Please visit Tradingcomputersnow.com
Add Comment
Computers Articles
1. Extract Trader Joes Grocery Store Location Data For InsightsAuthor: FoodDataScraper
2. Publix Grocery Data Scraping Services For Real-time Tracking
Author: Actowiz Solutions
3. Scraping Food Delivery Data From Menulog For Business Intelligence
Author: Food Data Scrape
4. Why Transportation Companies Need Embedded Bi Tools – Helical Insight
Author: Vhelical
5. Time Attendance System Singapore | 1 Sgd Mobile Attendance Easy Setup
Author: guard
6. Employee Gps Mobile Time Attendance | 1 Sgd Per Month Payroll Integration
Author: guard
7. Gps Nfc/qr Guard Tour Patrol – Free Payroll – 30sgd Monthly Subscription
Author: guard
8. Elearning Security Officers & Free Payroll – 30sgd Monthly Subscription
Author: guard
9. Guard Tour System & Security Patrol – 30sgd Per Month Plan
Author: guard
10. Top Benefits You Gain When You Hire Oracle Sql Developer For Efficient Data Management
Author: Stellanova GlobalTech
11. Discover How Microsoft Purview Compliance Manager Simplifies Cmmc Compliance For Gcc High Environment
Author: ECF Data
12. Scraping Food Ingredient Info From Sydney, Australia, For Insights
Author: Food Data Scrape
13. Best Website Design Perlis | Rm499 Unlimited Pages – Creative Solutions
Author: mobiwork
14. Rm499 Unlimited Pages Custom Web Application Development | Quality Guaranteed
Author: mobiwork
15. Flexible Work Arrangement & Free Payroll – 1sgd Monthly Pricing
Author: mobiwork