High-Frequency Trading
Computer-driven trading in huge volume over tiny time frames.
What is High-Frequency Trading?
Algorithms place and cancel orders in microseconds, often acting as market makers or arbitraging tiny price differences. Supporters credit it with narrower spreads; critics point to fragility, such as flash crashes, and speed advantages unavailable to ordinary investors.
High-Frequency Trading: a worked example
A firm co-locates its servers next to an exchange's to shave microseconds off execution.
More terms in Clients, Strategy & Tax
Sole Proprietorship
A business owned by one person with no legal separation from the owner.
General Partnership
Co-owners share management and unlimited liability; income passes through.
Limited Liability Company (LLC)
Limited liability for owners with pass-through taxation by default.
C Corporation
A separate taxpayer - profits taxed at the corporate level, then again as dividends.
S Corporation
A corporation that passes income through to shareholders, avoiding double tax.
Trust & Estate Accounts
Accounts run by a fiduciary - a trustee or an executor - under a governing document.
Foundations & Charities
Tax-exempt organizations investing for a mission, often in perpetuity.
Client Profile & Data Gathering
The financial and nonfinancial facts every recommendation must rest on.