High-Frequency Trading is a subset of algo-trading. Its major characteristics are high speed, a huge turnover rate, co-location, and high order-to-order ratios. It operates by using complex algorithms and sophisticated technological tools to trade securities.
Software used for high-frequency trading manages small scale trade orders sending them to a market or exchange at great speed. It benefits from dominican republic mobile database bid-ask spreads. The height of the speed involved in the transaction process makes this trading approach a market maker.
Learn more: In Pursuit of Ultra-Low Latency: FPGA in High-Frequency Trading
Real-time data feeds are needed to reduce microseconds delay and avoid profit loss. Usually, the latency should be between 300 – 800 nanoseconds. This is achieved with a high-performance software, low-latency networks, and FPGA-based hardware acceleration.
Opportunities are noted through sensing large size orders that are pending by placing small-sized multiple orders and analyzing the pending and execution time. The successfully noted opportunities in the form of pending orders are then capitalized by adjusting prices to cover them and make profits.