High Frequency Trading at Funds

                       

Small investors benefit from a reduction in trading costs. High-frequency trading helps, despite much of the notoriety it’s getting in the media.

Among costs are the bid-ask spread. A wide spread means the fund must pay significantly more to acquire or sell a stock.

                               

High- frequency trading has reduced this cost by narrowing spreads, Generally, wide spreads are seen as inefficient, with buyers and sellers having difficulty agreeing on an accurate price. Narrow spreads mean the market is working better. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole at tweeter.)