High-Frequency Trading (HFT)
Market Microstructure glossary · High Frequency Dynamics & Latency Arbitrage
Definition
Trading strategies that depend on extremely fast execution, typically holding positions for very short periods.
High-Frequency Trading (HFT) in plain English
High-Frequency Trading is trading done by computers at a speed no human could match — reacting to price changes in millionths of a second and often buying and selling within moments. The whole edge is being FAST: spotting a tiny price gap or a shift before anyone else and pouncing before it disappears. Picture a checkout lane so quick it grabs the last discounted item the instant it's marked down, then flips it, over and over, thousands of times a day. These traders rarely hold anything for long; their profit comes from many tiny, lightning-quick wins rather than betting on where a stock goes over weeks.
Also called: HFT
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