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write a 225 word I agree response and a question to a classmates discussion post that says High Frequency Trading has been developing for decades
write a 225 word I agree response and a question to a classmates discussion post that says "High Frequency Trading has been developing for decades and its importance has dramatically increased as time has passed. Overtime computers have gained more capabilities allowing for better algorithms and trading speeds have increased due to technology and co-locating resulting in very effective high frequency trading methods. High frequency trading works by using computer programs and algorithms to quickly execute large amounts of trades faster than humanly possible for small profits, but because of the volume of trades the profits add up. When it comes to high frequency trading there are some pros and cons that come with it. One of the perks of high frequency trading is that it brings more liquidity to the market by having constant trades instead of the money being tied up in long term trades. By trading frequently in large amounts they also minimize bid-ask spreads, lowering trading costs for everyone and bringing more efficiency to the markets. High frequency trading can also be seen as a pro or a con when it comes to electronic news feeds. They can react quicker to news than regular day traders
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