High-frequency Trading

High-frequency trading (HFT) is a type of automated trading that uses complex algorithms and powerful computers to execute a large number of orders at extremely high speeds. Traders leverage tiny price differences in financial markets, making profits on small fluctuations. HFT firms compete to capitalize on these opportunities before others can react, often holding positions for just fractions of a second. While it increases market liquidity, HFT can also contribute to volatility and has raised concerns about fairness and transparency in the trading system.