HFT
Business & Finance abbreviation · Stock Market & Investing
| Stands for | High-frequency trading |
|---|---|
| Categories | Business & Finance |
HFT stands for High-frequency trading, a stock market & investing abbreviation.
Automated trading that uses powerful computers, algorithms and ultra-fast connections to execute large numbers of orders in fractions of a second, profiting from tiny price differences, market making and arbitrage. HFT firms account for a large share of US stock trading volume.
Example: HFT firms pay to place their servers next to exchange matching engines to shave microseconds off trades.
Usage notes
Supporters say HFT narrows bid-ask spreads and adds liquidity; critics argue it can amplify volatility, as in the May 2010 "flash crash." Michael Lewis's 2014 book Flash Boys brought the practice to wide public attention. Microwave networks between Chicago and New York are typical HFT infrastructure.
Related abbreviations
More stock market & investing abbreviations
- FOK – Fill or kill
- FPO – Follow-on public offering
- FTSE – Financial Times Stock Exchange
- GARP – Growth at a reasonable price
- GDR – Global depositary receipt
- GTC – Good 'til canceled
- HKEX – Hong Kong Exchanges and Clearing
- ICE – Intercontinental Exchange
- IOC – Immediate or cancel
- IPO – Initial public offering
- IR – Investor relations
- ISIN – International Securities Identification Number