What position time holding time qualifies as High Frequency Trading ?

Discussion in 'Professional Trading' started by ASusilovic, Jul 22, 2009.

  1. [​IMG]

    By Irene Aldridge -- High-frequency trading has grown exponentially in the past several years, and, according to the FINalternatives 2009 Technology and High-Frequency Trading Survey, that growth is here to stay.

    A whopping 90% of respondents think that HFT has a bright future. In comparison, only half believe that the investment management industry has favorable prospects, and only 42% have a positive outlook when it comes to the U.S. economy. Given that dose of pessimism, it should be noted that HFT tends to work particularly well in volatile range-bound markets like the current economic environment.

    The optimism for HFT—which research firm Tabb Group estimates accounts for 73% of equities trading volume on U.S. exchanges—is bound to bring additional skill and capital to the high-frequency arena. At present, many financial industry participants understand the business of HFT, yet few understand the details and implementation involved. Some 39% of hedge fund managers, investment advisers, executing brokers and proprietary traders have just “a little” understanding of the high-frequency business, according to the FINalternatives survey, with 52% reporting a solid understanding. By contrast, only 40% of the respondents report that they had a solid grip on the implementation of HFT, with 19% reporting no understanding of implementation tactics whatsoever.

    The outlook for HFT is largely driven by the high profitability potential of well implemented HFT systems. While traditional buy-side trading strategies hold positions for weeks or even months, HFT is characterized by fast turnover of capital. Instead of capturing large price changes over extended periods of time, HFT aims to book multiple small gains over short periods of time. An overwhelming 86% believe that the term “high-frequency trading” referred strictly to holding periods of only one day or less.

  2. 1) You answered your own "question".....1 day or less.
    2) How is it that the histogram adds up to more than 100%? :confused:
  3. academic


    As an example, if you were to say that HFT is between 1 second and 1 hour, you would have contributed to two bars. It is designed to show distribution.
  4. 1) You answered your own "question".....1 day or less.

    I would have answered 5 milli-seconds.

    2) How is it that the histogram adds up to more than 100%? :confused:

    Multiple answers permitted ?
  5. rosy2


    we're at a stage now where the clueless firms are getting bilked.
  6. Your clearing firm must love you! :cool:
  7. If 90% of respondents think HFT is wonderful, then the "strategy" is becoming "cannibalistic"........profitable firms are merely feasting on unprofitable firms before they throw-in-the-towel. :cool:
  8. They must have been the ones who voted "Over 3 months". :cool:
  9. This is a real issue, do you folks realise that 10% of yesterday's "...volume..." for all US equities was from just 3 stocks !!! We are having proper churning just for flipping rebates for the Algos. You guys might want to check out CIT and AIG intraday behaivour, especially at open. I don't mind markets being skewed by one group of participants, but in this case we are seriously getting screwed. To top it off we have the exchanges doing co-location , SEC, BaFin, ASE, FSA, FINRA, and all other government and regulatory bodies worldwide just bending over and give these clowns all access. Sure enough elements of SLP are better than floor specialists, but this is BOLLOCKS:mad:
  10. Gotta love complex event processing(ex: http://esper.codehaus.org/) as it has single handedly allowed developers in this field to prosper.

    I would answer this as less than 5 minute lately in the commodities markets.
    #10     Jul 22, 2009