High-Frequency Trading: Corporate super computers cornering the markets

CRAY super computer

CRAY super computer—Tom Purves (Flickr.com)

There is no doubt that most trading and data dissemination happens within super computers and large servers. These are conveniently located near huge exchanges to be able to capture data, transfer to third party systems and to make accurate calculations on what is relevant and what it not in an actual trading day. What seems to be lightning fast on our end is a series of impressive movement of information; data must be delivered fast, to get lightning fast results as well.

High Frequency Trading has been getting a lot of attention lately because it proves time and again that expert, reliable and fast data is needed for any company or investor to compete without a disadvantage.  What goes on when trading is done is actually very, very fast data movement involving fast computers and of course intelligent and efficient individuals behind the development of any trading system.

High Frequency Trading offers more than lightning fast trading results and market information; it also involves ultra fast technology or “big guns” that are involved in every trade to make sure that any investor will dominate the market effectively.

One of the most important factors that affect the speed of market data is the location of servers. High Frequency Trading has servers that are conveniently and strategically located near exchanges. Although investors who are interested in buying stocks can buy them without HFT, not using programs makes them vulnerable to the influence of other traders. HFT has a special algorithm feature that will help break down trading to the maximum benefit of the investor. There is clearly lower investor risk and possibly better profitability when a reliable algorithm system is used for any trading.

Other HFT features are Program Trading Models and Automatic Market Makers that can help investors make wise investment choices with the best possible yield. These programs will automatically stop trading when there are no opportunities and restart again when the market again becomes profitable. It’s like having your own investment specialist work for you 24/7.

Flash Trades are a convenient feature of HFT and although there are rumors of permanently banning flash orders, it is still considered one of the “secret weapons” of trading software.  Whenever an order comes to the exchange, it is required to disseminate the order into a much wider market to be able to guarantee the best price. But with Flash Orders, before the data is delivered to different markets, it is flashed for a very, very short period of time to allow a pool of investors in an exchange take advantage of a profitable venture.

Clearly that all these features make HFTs one of the most impressive systems to ever help investors in any aspect of their trading; from strategic server locations to ensure faster data transfer to features that will help land investors the best price for their bid High Frequency Trading will certainly continue to create the future movers and shakers of stock market trading.

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