All about High-Frequency Trading London

High-Frequency Trading London covers various paths of trading in which different parties participate and are affected in different ways. Given below are some things that newbie’s don’t know about this kind of trading. Read below to know further.

• Electronic trading comes under HFT but not all electronic trading is HFT

Financial instruments and trading equities have been around for a long time now. It is electric trading which has led to smaller spreads. The costs of trading are lowered down. Often, credit is taken by HFT companies to reduce spreads. Since all the trading is being done electronically, it is surely not a big deal.

• Speed isn’t a problem

People like looking at the speed of trading as an issue. However, it is not so. Speed is needed since 1st stock quotes were traded via telegraph. Since then, search for speed is never ending. Value wouldn’t be added by sub second trading or co location. It doesn’t create problems for market.

• There is a delta in the speed of trading

Right from the days when telegraph was used to sub milliseconds trading, everyone doesn’t trade at the same speed. Stocks can be traded easily on a 100mbs broadband connection which is fast as compared to the dial up connection. With this delta in speed, faster information is given about research, getting quotes, information and news. The trades can be reached faster to the broker. The same is applicable to High Frequency Trading London, banks and brokers. There is a competition of getting the fastest possible speed. Similarly, speed isn’t a problem.

What is the problem and what has changed?

People wonder as to what is changed. In past, the advantages of speed have been used for trading the portfolios. They know that there is an advantage of placing of trades or faster information and that it was used for owning and buying stocks. It is acceptable only if it is for few hours. You would get more power if you are able to figure out how speed can be leveraged for selling and buying stocks. With such changes, lot of money can be made and they can become fastest traders. All that people realize now is that lot of money can be made regardless of what is being traded.

So basically, the fastest players who have spent billions in getting the fastest access use this speed so that they can jump to the trading line. With this, they can view the trades coming to the market algorithmically or directly. When we talk about algorithmically, it means that the brainpower and speed of the firm is being used for taking as many data points as possible for predicting what trade would happen next. This task isn’t that easy. Very smart people are required for this task. If winning algorithms are created that would predict or anticipate what will happen in future or in milliseconds in equities or markets, millions of dollars can be made.

About the Author:

The writer is an expert in the field of Career in Trading Course with focus on Trading London and Trading Courses In London etc..