HFT (High Frequency Trading) Effects on Investors

The investment world has gained quite a bit of unwanted attention over the course of the last decade, from taking blame for the Great Recession to indulging in unnecessary fees and commissions that take earnings out of individual investors’ pockets. Some of the most recent news from Wall Street is the occurrence of high frequency trading, or HFT. This process involves applying highly sophisticated algorithm to trade orders at certain exchanges, essentially allowing skilled traders the ability to make buy and sell trades mere moments before public investors, like individuals and pension funds. Some tout the benefits of high frequency trading, specifically in maintaining a liquid and all around efficient marketplace for investors. However, a variety of concerns come into play when high frequency trading is the norm, directly impacting everyday investors.

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