Economy, asked by techmaniac1203, 1 year ago

Which typ of economics is required for high frequency trading?

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Answered by xyz8536
0

High-frequency trading became popular when exchanges started to offer incentives for companies to add liquidity to the market. For instance, the New York Stock Exchange (NYSE) has a group of liquidity providers called Supplemental Liquidity Providers (SLPs) that attempts to add competition and liquidity for existing quotes on the exchange. As an incentive to companies, the NYSE pays a fee or rebate for providing said liquidity. In July 2016, the average SLP rebate was $0.0019 for NYSE- and NYSE MKT-listed securities on NYSE. With millions of transactions per day, this results in a large amount of profits. The SLP was introduced following the collapse of Lehman Brothers in 2008, when liquidity was a major concern for investors.

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