High Frequency Trading

What is high frequency trading?

High Frequency Trading (HFT) is a form of algorithmic trading in which traders use high speed computers to execute trades at lightning speeds. The goal of these algorithms is to exploit small price differences in different markets, allowing for faster execution times and higher profits.

Oxford Languages

a type of algorithmic trading in which large volumes of shares are bought and sold automatically at very high speeds.
“according to some estimates, high-frequency trading accounts for 60% to 70% of all trades in US stocks”


High-frequency trading (HFT) is a type of algorithmic financial trading characterized by high speeds, high turnover rates, and high order-to-trade ratios that leverages high-frequency financial data and electronic trading tools. While there is no single definition of HFT, among its key attributes are highly sophisticated algorithms, co-location, and very short-term investment horizons. HFT can be viewed as a primary form of algorithmic trading in finance. Specifically, it is the use of sophisticated technological tools and computer algorithms to rapidly trade securities. HFT uses proprietary trading strategies carried out by computers to move in and out of positions in seconds or fractions of a second.