In question the HFT? The HFT is the use of programs of software with quantitative strategies that, following determined you rule they go off and they enter the market as orders as much of purchase as of sale with strong volume. These programs are worth of algorithmic formulas that respond to different variables: underlying price, amounts, schedules, markets and products and can go off automatically when the operating one in a certain action reaches certain conditions (when a determined price breaks a certain level, or that determined volume is surpassed, or that a market index breaks a determined level, among others). The computers gatillan thus orders after to receive information electronically. Absolutely imperceptible movements for the common investors, and that although they were it, nothing could do because the speed whereupon those take place transactions are of fractions of seconds. The computers outside decide, as if a human, when to buy and when to sell. The humans entered the information they programmed and them so that under certain conditions, they act. Investment banks, hedge funds, but also pension bottoms (around a 25%) and mutuales bottoms use this system to capture opportunities of gains operating before the rest of the market, and especially of the competition.
Three years ago, 30% of the transactions in the USA were carried out through algorithmic programs. Today, 70% of the volume in the USA are carried out through these programs. Also it is used in European markets, and action, derivatives, currencies, ETFs. The companies that are worth of the HFT, that represents around 2% of around 20,000 TRADING companies operating in the Bags of the USA, represent 73% of all the shareholding volume in the USA. Not only Goldman carries out east business for own portfolio. Small hundreds of propietary traders (that operate own portfolio do) it, providing with liquidity to the places, like good speculators who really are.