High Frequency Trading: How High Frequency Trading Impacts Small Traders and Investors

What You Need To Know About High Frequency Trading (HFT)

One of the most popular topics of conversation within trading circles today is High Frequency Trading (HFT) and its implications on smaller traders and the market in general.

Flash Boys, the recent book by Michael Lewis, has prompted much of this discussion. The book is unequivocal in its assertion that HFT is bad for both small traders and the market, pointing to events such as the flash crash of 2010 as evidence of its destructive nature and describing how it damages mutual fund investors to the tune of millions each year.

In the opposite camp, proponents of HFT argue that it does more good than harm. Luminaries such as Bill McNabb (CEO of Vanguard, the world’s largest mutual fund company) cite the positive effects on trading costs and spreads.

In this book we discuss how HFT works and the advantages and disadvantages to the small trader and the wider market.

Here is a preview of what you'll learn inside...

Chapter 1 – What Is HFT?
Chapter 2 – Is HFT New?
Chapter 3 – Market Advantages of HFT
– Increased Trading Liquidity
– Reduced Trading Costs
– Greater Market Efficiency
Chapter 4 – Market Disadvantages of HFT
– Lack of Fairness to Small Investors
– Possibility for Market Manipulation
– HFT Leads to Market Volatility
Chapter 5 – Final Notes