High-frequency trading (HFT) has become a significant factor in the movements of stocks in the financial markets. On June 11th, Bajaj Hindusthan Sugar and IRB Infrastructure Developers were particularly in focus due to active HFT activity.
Bajaj Hindusthan Sugar closed higher while IRB Infrastructure closed lower, which raised attention within the investment community.
HFT firms, also referred to as algo firms on steroids, utilize complex algorithms and powerful computers to execute trades at extraordinary speeds. Traditionally, these firms aim to capture the spread between spot and futures prices, but they have recently been active in smaller, less liquid markets as well.
The volumes generated by HFT firms often attract retail investors, drawing increased attention to these stocks in the live financial news and investment communities.
The impact of HFT on stock price movements and its interactions with retail traders raises important questions about market dynamics and efficiency, and will continue to be a notable topic of interest for market participants and regulatory bodies.
