Traders use powerful computers and special software to trade at great speed. This makes it possible to get special efficiency in pricing when buying and selling securities. I will get into those details at another time.
Advantages accrue to all those who use the system, which can include small investors who have accounts with institutions such as mutual funds and pension funds.
Yet politicians often complain that such trading hurts the “little guy.” What high-frequency and flash trading does is help compete among existing stock exchanges, some of whom may not have yet installed their version of faster trading and computer software.
That is the extent of all the hullabaloo you hear, other than populist ignorance by politicians.
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