DEFINITION
High Frequency Trading

"High frequency trading": (HFT) Trading activities using sophisticated technological tools and computer algorithms that generate a large number of daily trades at very fast speeds. Typically at the end of the day there is no open position in the market. Characteristics attributed to HFT are: 1. extraordinarily high speed using sophisticated computer programs for generating, routing, and executing orders;2. use of co-location services and individual data feeds offered by exchanges and others to minimize network and other types of time delays; 3. very short time-frames for establishing and liquidating positions; 4. the submission of numerous orders that are cancelled shortly after submission; 5. ending the trading day in as flat a position as possible.
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