High-frequency traders program powerful computers to scan the nation’s 13 exchanges and dozens of other trading venues to take advantage — within fractions of a second — of tiny pricing inconsistencies in the marketplace. Here is one hypothetical scenario to showcase the pricing strategies and decision-making process involved in high-frequency trading, as explained by Manoj Narang, chief executive of Tradeworx, a large high-frequency trading firm in New Jersey. Read related article.
Sources: Tradeworx, staff reports. Dina ElBoghdady and Tobey/The Washington Post.