Good News & Bad News, page-46320

Hi to all PLS folks today ... was noticing the amount of small digit trades again this morning and another consequential drop in SP, so did a bit of Googling on HFT.   Here is something FYI .... from Investopedia.
The bold italicized unlining is my edit.

"Key Takeaways

• High-frequency trading is an automated trading platform that large institutions use to transact many orders at high speeds.
• HFT systems use algorithms to analyze markets and spot emerging trends in a fraction of a second.
• Critics see high-frequency trading as an unfair advantage for large firms against smaller investors.

High-frequency trading (HFT) is an automated trading platform that large investment banks, hedge funds, and institutional investors employ. It uses powerful computers to transact a large number of orders at extremely high speeds.

These high-frequency trading platforms allow traders to execute millions of orders and scan multiple markets and exchanges in a matter of seconds, thus giving institutions that use the platforms an advantage in the open market.

The systems use complex algorithms to analyze the markets and are able to spot emerging trends in a fraction of a second. By being able to recognize shifts in the marketplace, the trading systems send hundreds of baskets of stocks out into the marketplace at bid-ask spreads advantageous to the traders.

By essentially anticipating and beating the trends to the marketplace, institutions that implement high-frequency trading can gain favorable returns on trades they make by virtue of their bid-ask spread, resulting in significant profits."  (end quote)

Most of the above is common knowledge, but it needs to be called out. Level Playing Field my a***!

GLTAH