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High-Frequency Trading and Its Impact on Markets

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  • Maureen O’Hara

Abstract

At the 2013 CFA Institute Financial Analysts Seminar, held in Chicago on 22–25 July, Maureen O’Hara discussed a new market paradigm: Trading has become faster, and market structure has fundamentally changed. In today’s market, high-frequency traders (HFTs) act on information revealed by low-frequency traders (LFTs). To survive, LFTs must avoid being detected by predatory algorithms of HFTs. LFTs can thrive by adopting trading strategies appropriate to the high-frequency trading world. At the 2013 CFA Institute Financial Analysts Seminar, held in Chicago on 22–25 July, Maureen O’Hara discussed a new market paradigm: Trading has become faster, and market structure has fundamentally changed. In today’s market, high-frequency traders act on information revealed by low-frequency traders. To survive, low-frequency traders must avoid being detected by predatory algorithms of high-frequency traders by using small brokers.

Suggested Citation

  • Maureen O’Hara, 2014. "High-Frequency Trading and Its Impact on Markets," Financial Analysts Journal, Taylor & Francis Journals, vol. 70(3), pages 18-27, May.
    • Handle: RePEc:taf:ufajxx:v:70:y:2014:i:3:p:18-27
    DOI: 10.2469/faj.v70.n3.6
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