High-Frequency Trading (HFT) is a sophisticated trading strategy characterized by the rapid execution of a large number of trades within extremely short timeframes, often in milliseconds. This approach relies on advanced computer algorithms and high-speed telecommunication networks to capitalize on minimal price fluctuations and exploit market inefficiencies.
While HFT has the potential for quick profit generation, it is not without risks. The speed and volume of transactions can contribute to market volatility and may pose challenges for traditional market participants. Additionally, concerns have been raised about the impact of HFT on market integrity and fairness.