HFT Strategies: From Market Making to Statistical Arbitrage! 🧠🔄
By July 2025, HFT firms employ a variety of strategies that are constantly adapting to market conditions:
Market Making: Constantly placing buy and sell orders to profit from the spread (the difference between buy and sell prices).
Arbitrage: Simultaneously buying an asset on one exchange and selling it on another, exploiting microscopic price differences.
Momentum Trading: Rapidly reacting to news events or large orders, predicting short-term price movements.
Liquidity Detection: Searching for large hidden orders in the order book to place your orders ahead of them.
Latency Arbitrage: Utilizing microscopic delays in market data reception among different participants for an advantage. These strategies require not only speed but also extremely precise market analysis.