🔍 What is HFT (High-Frequency Trading)?

HFT is a computer-based trading method where traders use powerful algorithms to place thousands of trades in milliseconds.

⚙️ How HFT Works:

1. Algorithms analyze market data (price, volume, etc.)

2. Superfast computers send orders in microseconds

3. They aim to profit from tiny price changes

📊 Key Features of HFT:

- Ultra-fast order execution

- Low latency (super low delay)

- Huge trading volume daily

- Done by institutions (not retail traders)

💰 How HFT Makes Profit:

- Market Making: Earns from bid/ask spread

- Arbitrage: Buys in one exchange, sells in another

- Momentum Ignition: Tries to start price moves

🧠 Pros:

✅ Increases market liquidity

✅ Reduces bid-ask spreads

✅ Makes markets more efficient

⚠️ Cons:

❌ Can cause flash crashes

❌ Unfair for small (retail) traders

❌ Increases market manipulation risk

📌 Famous HFT Firms:

- Citadel Securities

- Jump Trading

- Virtu Financial

#hft