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What Are the Pros and Cons of High Frequency Trading

question 6

Essay

What are the pros and cons of high frequency trading (HFT) and dark pools? Do they improve market efficiency? Explain.


Definitions:

Stimulus Package

A package of economic measures put together by a government to stimulate a floundering economy, typically through a combination of spending increases and tax reductions.

Economic Downturn

A period of negative growth in an economy, characterized by a decrease in the GDP, employment, and spending.

Inflation

The frequency at which the average pricing for goods and services uplifts, subsequently reducing the power of procurement.

Opportunity Cost

The value of the best alternative forgone, where a choice needs to be made between several mutually exclusive alternatives under conditions of scarcity.

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