High-Frequency Trading (HFT) Definition - Glossary

High-Frequency Trading (HFT) is a technique using powerful computers to execute vast numbers of trades within microseconds.

High-Frequency Trading (HFT) is a trading strategy that utilizes advanced algorithms and powerful computers. It allows traders to execute large volumes of orders at incredibly high speeds, often within microseconds. This approach capitalizes on small price discrepancies in the market, generating profit through rapid execution. HFT is prevalent in highly liquid markets, including crypto and fiat exchanges. It requires substantial technological infrastructure and low-latency connections to trading venues. While offering potential for profit, HFT also raises concerns about market stability and fairness. Its impact on market dynamics makes it a topic of both interest and controversy in financial circles.