If you’ve ever wondered what is high frequency trading (HFT), here’s the short answer: it is an algorithmic trading approach that uses ultra-fast...

If you’ve ever wondered what is high frequency trading (HFT), here’s the short answer: it is an algorithmic trading approach that uses ultra-fast computers and network connections to submit and cancel large numbers of orders in fractions of a second. HFT firms seek tiny price discrepancies across markets, then scale those small edges through speed, automation, and strict risk controls. While headlines often focus on controversy, modern HFT also provides liquidity, narrows bid-ask spreads, and helps markets discover prices more efficiently. At its core, HFT is about minimizing latency—the time it takes data and orders to travel—by optimizing code, colocating servers near exchanges, and routing orders smartly. Strategies vary, from market making and statistical arbitrage to event-driven trades triggered by data releases. Whether you’re a student, investor, or curious professional, this page explains how HFT works, who uses it, the benefits and risks, and the terminology you’ll see in articles and regulatory reports. Explore the FAQs and get a clear, balanced overview.

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