BoE research finds high-frequency trading makes prices more efficient
High-frequency trades based on information
Automated trades at "lightning-fast" speeds - high-frequency trading (HFT) - appears to help markets form prices efficiently, according to research published by the Bank of England.
The working paper, Interactions among high-frequency traders, by Evangelos Benos, James Brugler, Erik Hjalmarsson and Filip Zikes tests the actions of high-frequency traders against those of straightforward investment banks, using "unique transactional data" broken down into increments of ten seconds.
They find that
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