HFT

What is an HFT in regards to stocks?

High-frequency trader

HFT is shorthand for a stock market trader who uses advanced computers and algorithms to make rapid trades, often in fractions of a second. The HFT strategy revolves around the idea that if you take advantage of any price changes (usually minimal), the tiny but numerous gains will accumulate into a substantial, worthwhile amount.

HFTs have grown since the early 1980s when the stock market went fully electronic. Now they are a significant aspect of today’s stock markets, with their rapid trading affecting prices and liquidity.

While HFTs aim to make fast money, their activity makes the market more volatile. Investors often view high-frequency traders negatively because those with the fastest technology have an unfair advantage.

Example

They should crack down on HFTs. I think all of that stuff should be illegal
Agreed
HFT Reddit post
HFT Reddit post

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Updated October 15, 2024

HFT definition by Slang.net

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