Category: High-frequency trading

Why high-frequency traders are here to stay

Replacing continuous time trading with frequent batch auctions substantially mitigates the advantage that latency arbitrageurs, such as high-frequency traders, enjoy. Discrete time trading reduces the number of races to the top of the order book. It does not altogether reduce the advantage latency arbitrageurs have though.

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Does high-frequency trading benefit investors?

Market participants can have a variety of legal competitive advantageous in public security markets. One of the more controversial ones is speed which is exploited by high-frequency traders (HFTs). Should the activities of latency arbitrageurs, such as HFTs, be curtailed or are they beneficial to markets?

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