_bcron@lemmy.worldtoExplain Like I'm Five@lemmy.world•ELI5: Why is high frequency trading allowed?English
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19 days agoIt adds liquidity and that does more good than bad for everyone, whether you’re a retail investor looking to enter or exit a position without facing a hefty ‘tax’ from a wide bid-ask spread, or you’re managing an ETF and need to dump 300k shares of something while rebalancing.
Without HFT a lot of tickers would look like options and futures contracts - no volume, wide spreads, and rife with abuse from people walking orders up and down
If you’re HFT/scalping you’ll almost always be trading DMA in which case you’ll almost always have per-share commission, usually less than .005