High-Frequency Trading (HFT) What is High-Frequency Trading? High-Frequency Trading (HFT) is a form of algorithmic trading that executes a large number of trades at extremely high speeds to capitalise on small price discrepancies in financial markets. Explanation HFT relies on advanced algorithms, low-latency networks, and high-speed infrastructure to gain a competitive edge. It is commonly used by hedge funds and financial institutions to achieve rapid, precise trading. Practical Example of High-Frequency Trading A trading firm uses HFT to buy and sell stocks within milliseconds, profiting from tiny price changes across markets.