High-frequency trading, to put it bluntly, means that the interval between transactions is extremely short, usually ten minutes or even a few seconds. It first appeared in the late 1990s, and now it has developed into a key energy in the foreign exchange market. But in recent years, high-frequency trading has been opposed. Financial institutions, foreign exchange dealers and some authoritative experts have just begun to denounce the disadvantages of high-frequency trading, while some applicable personnel fully support the development trend of high-frequency trading. So why is high-frequency trading full of objections in futures?

Benefits of high-frequency trading

Firstly, discuss the benefits of high-frequency trading of commodity futures. First, high-frequency trading uses complex optimization algorithms, and with the help of fast program flow, quotation software and related hardware configuration equipment, it exceeds the actual effect of profiting from short-term market fluctuations. This trading method has great advantages for investors, because it can skillfully capture the rise and fall of futures in just a few seconds to a few minutes and then exceed the relatively stable profit, and theoretically it can conduct tens of millions of high-frequency transactions every day, so the profit will be endless.

Secondly, the speed of high-frequency transaction settlement information is close to the speed of light. At present, the speed of light from new york to London is 65 milliseconds, while Nasdaq's faster transaction rate is close to 0.00 1ms to 1ms, and people's faster reaction time is 1000ms, which is 1 sec. Therefore, such an efficient and fast response speed has greatly introduced abundant liquidity into the futures market, reduced the transaction spread, further reduced the spread cost and comprehensively improved the market efficiency.

Disadvantages of high-frequency trading

Under normal circumstances, high-frequency trading must be carried out according to procedures. In order to surpass the competitiveness, more technology and professional hardware must be equipped. It can be said that high-frequency trading is all about "who is interested in the fast network speed", which creates an unreasonable natural environment for market competition for individual investors in the foreign exchange market. Because individual investors don't have technical and professional hardware configuration equipment and complex optimization algorithm trading, high-frequency trading is to take advantage of the shortcomings of slow trading of individual investors. It is incomprehensible for individual investors to trade ten million times a day, disrupting all futures markets, and individual investors, especially short-term investors, are very prone to losses.

In addition to the harm of speed, the technical instability of high-frequency trading greatly aggravates the volatility of futures, because high-frequency trading must accurately program the trading optimization algorithm. If there is a small mistake of 1 in the trading number, all assets will be damaged as a result, and many other high-frequency transactions will lead to the promise of trading software and the market will collapse rapidly.

The bad influence of high-frequency trading is not only here, but also the field that is really opposed depends on its blank page. High-frequency trading is very easy to be controlled by people with ulterior motives, and it usually throws out order information that is difficult to implement, which leads to the illusion of requirements, lures investors or related institutions to submit orders, and lacks fairness, justice and compatibility. Not only for individual investors, foreign exchange dealers, or large and medium-sized financial institutions, high-frequency trading not only conflicts with the participation of individual investors, but also continues to damage the rights and interests of major institutions, just like walking across the street.

Where will high-frequency trading go?

Nowadays, high-frequency trading has long been an energy that cannot be ignored in the market. It has created a high turnover for the market, but it has been out of control. In 20 14, the Federation of British Stock Exchanges, the Federal Bureau of Investigation, the Federation of Commodity Futures and Trading and the United States Department of Justice began to investigate the insider trading behavior of the high-frequency trading industry. 2065438+July 2009, Renaissance, a high-tech hedge fund, used complex computer algorithms and cooperated with many network servers and their atomic clocks, which could keep executing trading instructions with you in a few billionths of a second and devoted itself to eliminating high-frequency trading.

In 20 19, the investment analyst of Credit Suisse applied the unique ExPRT transaction statistics of Credit Suisse. Under the application of 10- 12% US stock trading volume statistics, the internet big data of the time required for pure non-high-frequency traders (including buyers, retail investors and institutional investors) to implement each trading center is obtained. According to statistics, it is unlikely that all participants in the market will be treated fairly. For these investors who have low investment risk and attach great importance to trading volume and time, if they don't want to take the risk of holding positions, they must make some compromises at other levels.

It is not difficult to see that many parties who are suitable for high-frequency trading and those who are not suitable for high-frequency trading often have valid truth and statistical data respectively, and objections may cause controversy again.