HFT (High Frequency Trading) Effects on Investors

7. Exposure to Risk

For buy and hold investors, high frequency trading does not impose a significant threat. However, for individual investors who trade regularly, including pooled pension and mutual funds, price drops due to quick trading from HFT professionals can lead to higher risk exposure. The fact that the system of high frequency trading is mostly obscure does not provide the transparency needed to effectively safeguard investments from dramatic price drops or increases.