Arbitrage Trading Software: strategy example
Latency arbitrage is the practice of one party, perhaps a
predatory HFT firm, exploiting a time disparity and earning profits with a
computer algorithm for trading, when that trade is executed solely because of a
latency advantage. Latency arbitrage has raised many heated discussions among
all market participants, the SEC and government law makers for many years, yet
this unfair unequal access to US equity markets is still the main strategy of
many predatory firms.
Let’s take a look at what exactly latency arbitrage means,
why it occurs, and what we can do about it.
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