high frequency

high frequency

a radio-frequency band or radio frequency lying between 3 and 30 megahertz

Collins Discovery Encyclopedia, 1st edition © HarperCollins Publishers 2005

high frequency

[′hī ¦frē·kwən·sē]

(communications)

Federal Communications Commission designation for the band from 3 to 30 megahertz in the radio spectrum. Abbreviated HF.

McGraw-Hill Dictionary of Scientific & Technical Terms, 6E, Copyright © 2003 by The McGraw-Hill Companies, Inc.

high frequency

The frequency band between 3 and 30 MHz. This normally is used for long-range air-to-ground communications.

An Illustrated Dictionary of Aviation Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved

HF

(High Frequency) A range of radio frequencies from 3 to 30 MHz. The HF band is used for amateur radio, marine, aviation and military communications and high-frequency RFID tags.

With regard to audio, high-frequency waves are typically above 3,000 Hz. See frequency bands.

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high-frequency trading

Buying and selling large quantities of stocks in split seconds, and making pennies or fractions of a penny per share. High-frequency trading (HFT) is performed entirely by computer algorithms that look for and take advantage of small price discrepancies of the same stock on different exchanges. HFT computers are constantly bidding and offering 100-share lots of thousands of different stocks to determine moment-to-moment prices. In addition, traders can spoof the market by placing large sell orders, cancel them milliseconds later and immediately buy the stocks at a lower price, which they caused by injecting negativity into the market.

High-frequency traders compete with other high-frequency traders all day long. In order to profit, the buys and sells must be executed immediately, and the shorter transmission pathways between orders and executions make the difference. To speed up the process, high-speed traders locate their computers within the same datacenter as the stock exchange computers or as close by as possible. In the most extreme example, to shave off nanoseconds, a fiber optic line was laid in the straightest line possible between Chicago and New Jersey (between the Chicago futures exchange and the New York stock exchanges).

Extremely Controversial
Proponents claim high-frequency trading is simply an advanced form of algorithmic trading like all the other widely used financial formulas. High-frequency traders also claim their systems make a more uniform market and have a stabilizing effect.

Opponents claim HFT is downright deceitful, making money by executing software that makes profits on 99% of its trades. They claim traders make billions per year without contributing any value to society. In the Flash Crash of May 6, 2010, the Dow swung 1,000 points within minutes. Regulators reported that high-frequency trading exacerbated market volatility after the sale of unusually large futures contracts. Had the event occurred at a different time of day, the effects might have gone global. Opponents believe that this form of trading will wreak even greater havoc on the market in the future. See high-frequency crypto trading.

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