High-Frequency Trading (HFT)
High-frequency trading (HFT) strategies use sophisticated algorithms to execute trades at lightning-fast speeds, often measured in microseconds. This guide explains how high-frequency trading software works, from the pros and cons to UK regulations and risk management considerations. Our team have also listed the best high-frequency trading brokers and platforms:
High-Frequency Trading Brokers UK
-
IC Markets is an internationally acclaimed forex and CFD broker, admired for its competitive pricing, diverse trading instruments, and superior technology. Established in 2007 and based in Australia, the firm is under the regulation of ASIC, CySEC, and FSA. It has successfully drawn over 180,000 clients from more than 200 nations.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Bonds, Futures, Crypto ASIC, CySEC, FSA, CMA MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $200 0.01 Lots 1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global) -
Interactive Brokers (IBKR), a leading brokerage, offers access to 150 markets across 33 countries and provides extensive investment services. With more than 40 years of experience, this Nasdaq-listed company complies with strict regulations from the SEC, FCA, CIRO, and SFC. It is among the most reliable brokers worldwide for traders.
Instruments Regulator Platforms Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, Cryptocurrencies FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower Min. Deposit Min. Trade Leverage $0 $100 1:50 -
Founded in 1974, IG is a part of IG Group Holdings Plc, a publicly listed brokerage (LSE: IGG). The company provides spread betting, CFD, and forex trading, offering access to over 17,000 markets. Its platforms and investing apps are notably user-friendly. Over the past 50 years, IG has consistently been an industry leader, excelling in all essential areas for traders.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM Web, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral, ProRealTime Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:222 (Pro) -
Founded in 2006, FxPro has built a reputation as a reliable non-dealing desk (NDD) broker, providing trading access across more than 2,100 markets to over 2 million clients globally. It has received over 100 industry awards, reflecting its favourable conditions for active traders.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Futures, Spread Betting FCA, CySEC, FSCA, SCB, FSA FxPro Edge, MT4, MT5, cTrader, AutoChartist, TradingCentral, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $100 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
Founded in Australia in 2010, Pepperstone is a highly regarded broker specialising in forex and CFDs. Serving more than 400,000 clients globally, it provides access to over 1,300 financial instruments through popular platforms like MT4, MT5, cTrader, and TradingView. Its fee structure is both low and transparent. With regulation by reputable bodies such as the FCA, ASIC, and CySEC, Pepperstone guarantees a safe trading environment for traders at every level.
Instruments Regulator Platforms CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto (only Pro clients), Spread Betting FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
Founded in 1996, Swissquote is a prominent Swiss bank and broker, providing online trading opportunities for an impressive portfolio of three million products, including forex, CFDs, futures, options, and bonds. Renowned for its reliability, Swissquote has earned a solid reputation through pioneering trading solutions. It was the first bank to introduce cryptocurrency trading in 2017, and has since expanded its offerings to include fractional shares and the Invest Easy service.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Bonds, Options, Futures, ETFs, Crypto (location dependent) FCA, FINMA, CSSF, DFSA, SFC, MAS, MFSA, CySEC, FSCA CFXD, MT4, MT5, AutoChartist, TradingCentral Min. Deposit Min. Trade Leverage $1,000 0.01 Lots 1:30 -
FXTM, founded in 2011, is a forex and CFD broker operating worldwide. Regulated by top authorities such as the FCA, it provides a secure trading environment. With over 1,000 markets and three account types, FXTM accommodates traders of all experience levels.
Instruments Regulator Platforms CFDs, Forex, Commodities, Indices, Stocks, Crypto FCA, FSC, CMA FXTM Trader, MT4, MT5 Min. Deposit Min. Trade Leverage $200 0.01 Lots 1:30
IC Markets
Interactive Brokers
IG Index
FXPro
Pepperstone
Swissquote
FXTMSafety Comparison
Compare how safe the High-Frequency Trading (HFT) are and what features they offer to protect traders.
| Broker | Trust Rating | FCA Regulated | Negative Balance Protection | Guaranteed Stop Loss | Segregated Accounts |
|---|---|---|---|---|---|
| IC Markets | ✘ | ✔ | ✘ | ✔ | |
| Interactive Brokers | ✔ | ✔ | ✘ | ✔ | |
| IG Index | ✔ | ✔ | ✔ | ✔ | |
| FXPro | ✔ | ✔ | ✘ | ✔ | |
| Pepperstone | ✔ | ✔ | ✘ | ✔ | |
| Swissquote | ✔ | ✔ | ✘ | ✔ | |
| FXTM | ✔ | ✔ | ✘ | ✔ |
Payments Comparison
Compare which popular payment methods the High-Frequency Trading (HFT) support and whether they have trading accounts denominated in British Pounds (GBP).
| Broker | GBP Account | Debit Card | Credit Card | Neteller | Skrill | Apple Pay |
|---|---|---|---|---|---|---|
| IC Markets | ✔ | ✘ | ✔ | ✔ | ✔ | ✘ |
| Interactive Brokers | ✔ | ✔ | ✘ | ✘ | ✘ | ✘ |
| IG Index | ✔ | ✔ | ✔ | ✘ | ✘ | ✘ |
| FXPro | ✔ | ✘ | ✔ | ✔ | ✔ | ✘ |
| Pepperstone | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| Swissquote | ✔ | ✔ | ✔ | ✘ | ✘ | ✘ |
| FXTM | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
Mobile Trading Comparison
How good are the High-Frequency Trading (HFT) at mobile trading using apps or other mobile interfaces.
| Broker | Mobile Apps | iOS Rating | Android Rating | Smart Watch App |
|---|---|---|---|---|
| IC Markets | iOS & Android | ✘ | ||
| Interactive Brokers | iOS & Android | ✔ | ||
| IG Index | iOS & Android | ✔ | ||
| FXPro | iOS & Android | ✘ | ||
| Pepperstone | iOS & Android | ✘ | ||
| Swissquote | iOS & Android | ✘ | ||
| FXTM | iOS & Android | ✘ |
Beginners Comparison
Are the High-Frequency Trading (HFT) good for beginner traders, that might want an affordable setup to get started, along with good support and educational resources?
| Broker | Demo Account | Minimum Deposit | Minimum Trade | Support Rating | Education Rating |
|---|---|---|---|---|---|
| IC Markets | ✔ | $200 | 0.01 Lots | ||
| Interactive Brokers | ✔ | $0 | $100 | ||
| IG Index | ✔ | $0 | 0.01 Lots | ||
| FXPro | ✔ | $100 | 0.01 Lots | ||
| Pepperstone | ✔ | $0 | 0.01 Lots | ||
| Swissquote | ✔ | $1,000 | 0.01 Lots | ||
| FXTM | ✔ | $200 | 0.01 Lots |
Advanced Trading Comparison
Do the High-Frequency Trading (HFT) offer features that allow for more advanced trading strategies?
| Broker | Automated Trading | Pro Account | Leverage | VPS | AI | Low Latency | Extended Hours |
|---|---|---|---|---|---|---|---|
| IC Markets | Expert Advisors (EAs) on MetaTrader, cBots on cTrader, Myfxbook AutoTrade | ✘ | 1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global) | ✔ | ✘ | ✔ | ✘ |
| Interactive Brokers | Capitalise.ai & TWS API | ✘ | 1:50 | ✘ | ✔ | ✔ | ✔ |
| IG Index | Expert Advisors (EAs) on MetaTrader, build your own on ProRealTime | ✔ | 1:30 (Retail), 1:222 (Pro) | ✔ | ✘ | ✔ | ✔ |
| FXPro | Expert Advisors (EAs) on MetaTrader, cBots on cTrader | ✔ | 1:30 (Retail), 1:500 (Pro) | ✔ | ✘ | ✔ | ✘ |
| Pepperstone | Expert Advisors (EAs) on MetaTrader | ✔ | 1:30 (Retail), 1:500 (Pro) | ✔ | ✔ | ✔ | ✘ |
| Swissquote | Expert Advisors (EAs) on MetaTrader and FIX API solutions | ✘ | 1:30 | ✘ | ✔ | ✔ | ✘ |
| FXTM | Expert Advisors (EAs) on MetaTrader | ✔ | 1:30 | ✔ | ✘ | ✔ | ✘ |
Detailed Rating Comparison
Use this heatmap to compare our detailed ratings for all of the High-Frequency Trading (HFT).
| Broker | Trust | Platforms | Mobile | Assets | Fees | Accounts | Support | Research | Education |
|---|---|---|---|---|---|---|---|---|---|
| IC Markets | |||||||||
| Interactive Brokers | |||||||||
| IG Index | |||||||||
| FXPro | |||||||||
| Pepperstone | |||||||||
| Swissquote | |||||||||
| FXTM |
Our Take On IC Markets
"IC Markets provides excellent pricing, swift execution, and easy deposits. With cutting-edge charting tools like TradingView and the Raw Trader Plus account, it continues to be a preferred option for intermediate and advanced traders."
Pros
- IC Markets provides some of the industry's narrowest spreads, offering 0.0-pip spreads on major currency pairs. This makes it an extremely cost-effective choice for traders.
- Access over 2,250 CFDs across diverse markets like forex, commodities, indices, shares, bonds, and cryptocurrencies. This variety enables traders to employ diversified strategies.
- IC Markets provides reliable 24/5 support, especially for account and funding queries, drawing from direct experience.
Cons
- IC Markets provides metals and cryptocurrencies for trading through CFDs, though the selection is narrower compared to brokers such as eToro. This limits opportunities for traders focused on these asset classes.
- Certain withdrawal methods incur fees, including a $20 charge for wire transfers. These costs can reduce profits, particularly with frequent withdrawals.
- Although there are four top-tier third-party platforms available, the absence of in-house software or a trading app tailored for novice traders is notable.
Our Take On Interactive Brokers
"Interactive Brokers ranks highly for seasoned traders due to its robust charting platforms, live data, and bespoke layouts via the new IBKR Desktop app. Its competitive pricing and sophisticated order choices appeal to traders, and its wide equity options are industry-leading."
Pros
- While initially targeting seasoned traders, IBKR has recently widened its appeal by eliminating its $10,000 minimum deposit requirement.
- IBKR consistently offers unparalleled access to global equities, with thousands of shares available across over 100 market centres in 24 countries, including the recently added Saudi Stock Exchange.
- The new IBKR Desktop platform combines the top features of TWS with customised tools such as Option Lattice and MultiSort Screeners, providing an impressive trading experience for traders of all skill levels.
Cons
- IBKR offers a variety of research tools, but their inconsistent placement across trading platforms and the 'Account Management' webpage creates a confusing experience for users.
- The learning curve for TWS is quite steep, making it tough for novice traders to navigate and grasp all its features. In contrast, Plus500's web platform is far more accessible for those new to trading.
- You are limited to a single active session per account, meaning you cannot use both your desktop programme and mobile app at the same time. This restriction can occasionally lead to a frustrating experience for traders.
Our Take On IG Index
"IG offers a complete package with an intuitive online platform, top-tier beginner education, advanced charting tools through its TradingView integration, real-time data, and swift execution for seasoned traders."
Pros
- As a seasoned broker, IG adheres to stringent regulatory standards across various regions, ensuring significant trust.
- The web-based platform supports traders at every level, offering advanced charting tools and real-time market data vital for trading. Additionally, IG now includes TradingView integration.
- The IG app provides an excellent mobile trading experience with an intuitive design, earning it the Runner Up position in our 'Best Trading App' award.
Cons
- IG has ended its swap-free account, diminishing its attractiveness to Islamic traders.
- In the UK and EU, negative balance protection is available. However, US clients lack account protection and guaranteed stop losses.
- Beginners may find IG's fees complicated, as they vary depending on the trades or services. This could cause confusion and unexpected costs.
Our Take On FXPro
"FxPro is an excellent choice for traders, offering swift execution speeds under 12ms, reduced fees since 2022, and outstanding charting platforms like MT4, MT5, cTrader, and FxPro Edge."
Pros
- FxPro uses a 'No Dealing Desk' (NDD) model for swift and transparent order execution, usually within 12 milliseconds, making it well-suited for short-term trading strategies.
- FxPro provides four dependable charting platforms, including the user-friendly FxPro Edge. It features more than 50 indicators, 7 types of charts, and 15 different timeframes.
- FxPro's Wallet is a notable feature enabling traders to securely manage their funds. It ensures additional protection and ease by separating unused funds from active trading accounts.
Cons
- FxPro, with its $10M funded demo account and expanding Knowledge Hub, mainly caters to experienced traders. Beginners might find its account and fee structure challenging to understand.
- FxPro offers customer support five days a week around the clock, accessible via various platforms, and the service quality is reliable based on tests. However, the absence of weekend support can be a drawback for traders requiring help beyond standard market times.
- There are no passive investment options such as copy trading or interest on cash. While traders might not find these essential, competitors like eToro, which accommodate both active and passive investors, offer more extensive services.
Our Take On Pepperstone
"Pepperstone is a premier trading platform, providing tight spreads, swift execution, and sophisticated charting tools for seasoned traders. Beginners benefit from no minimum deposit, comprehensive learning materials, and outstanding 24/7 support."
Tobias Robinson
Reviewer
Pros
- Over the years, Pepperstone has consistently garnered recognition from DayTrading.com’s annual awards. Recently, it was honoured as the 'Best Overall Broker' in 2025 and was the 'Best Forex Broker' runner-up the same year.
- Support for top-tier charting platforms such as MT4, MT5, TradingView, and cTrader. These tools accommodate different short-term trading methods, including algorithmic trading.
- Pepperstone offers rapid execution speeds of approximately 30ms, enabling swift order processing and execution, making it ideal for traders.
Cons
- Pepperstone's demo accounts expire after 30 days, which may not provide sufficient time to explore various platforms and evaluate trading strategies.
- Pepperstone doesn't offer cTrader Copy, a favoured feature for copying trades found in the cTrader platform, which is available on other platforms such as IC Markets. However, Pepperstone has launched its own user-friendly copy trading app.
- Despite enhancements to its range of markets, crypto offerings are relatively limited compared to other brokers who focus on this area, with no option to invest in real coins.
Our Take On Swissquote
"Swissquote is ideal for traders seeking a tailor-made platform, like its CXFD, which incorporates Autochartist for automated chart analysis to support trading decisions. Yet, its moderate fees and high $1,000 minimum deposit could deter novice traders."
Pros
- Swissquote offers sophisticated research tools such as Autochartist for technical analysis and real-time news from Dow Jones. The firm's exclusive Market Talk videos and Morning News provide daily expert insights, catering to active traders.
- Swissquote is designed for rapid trading strategies, including scalping and high-frequency approaches. With an average execution speed of 9ms and a 98% fill ratio, it also supports FIX API.
- Swissquote is highly reputable due to its status as a bank, its presence on the Swiss stock exchange, and its authorisations from credible regulators such as FINMA in Switzerland, FCA in the UK, and CSSF in Luxembourg.
Cons
- Analysis indicates that Swissquote's charges are relatively high. Forex spreads on Standard accounts begin at 1.3 pips, whereas brokers such as Pepperstone or IC Markets offer starting spreads of 0.0 pips. Additionally, transaction fees for non-Swiss stocks and ETFs could accumulate significantly for active traders.
- Swissquote focuses on serving professional and high-net-worth clients, requiring substantial initial deposits, such as $1,000 for Standard accounts. This approach is less favourable for smaller traders who prefer brokers offering higher leverage and no deposit requirements.
- Unlike brokers like eToro that offer social trading capabilities, Swissquote does not provide tools for community interaction or replicating successful traders. This absence can reduce its attractiveness to those who prioritise peer-to-peer learning.
Our Take On FXTM
"FXTM caters to seasoned traders, offering accounts tailored for short-term strategies. It won DayTrading.com's 'Best ECN Account' award. Experience tight, reduced spreads and benefit from VPS support for algorithmic trading."
Pros
- FXTM’s UK division provides exceptional client safeguards, including top-tier coverage of up to $1 million per client and segregated accounts, reinforcing security for traders with substantial balances.
- FXTM’s Advantage and Advantage Plus accounts provide tight spreads starting at 0.0 pips and charge low or zero commissions, tailored for traders aiming to reduce expenses.
- FXTM stands out as a leading MetaTrader brokerage, offering custom MT4 tools like a Pivot Point Indicator, Pip Value Calculator, and Spread Indicator for more accurate trading.
Cons
- FXTM's educational resources, including its insightful e-books, have significantly improved. However, these materials are predominantly aimed at novices, which may not attract seasoned traders.
- FXTM specialises in CFDs and a select range of stocks but does not offer ETFs, options, or futures. This may restrict diversification for traders aiming to explore various market opportunities.
- FXTM imposes a $10 inactivity fee following just three months without trading. This is shorter than the period many brokers offer and might frustrate those who do not trade regularly.
High-Frequency Trading Explained
High-frequency trading programs execute a large volume of trades ultra-fast, from hundreds or even thousands of trades per second. These algorithms are typically designed using open source programming languages like Python or Java and are executed on platforms that are optimised for high-frequency trading.
This style of automated trading has become increasingly popular in recent years, particularly following the implementation of MiFID II regulations, which placed greater emphasis on the use of electronic trading and data analytics in financial markets. It is now estimated that 50% of US stock trading volumes are driven by high-frequency trading systems.
How High-Frequency Trading Works
High-frequency trading firms use various strategies to identify profitable opportunities, such as statistical arbitrage and market making. These often rely on quantitative analysis techniques, plus machine and deep learning algorithms that can identify patterns and trends in market data that are difficult or impossible for human traders to detect.
High-frequency trading typically relies on specialised hardware and software designed to reduce latency. Reducing latency, or the delay between receiving market data and executing a trade, is critical to the success of high-frequency trading. Even small delays can result in missed opportunities or unfavourable execution quotes. As such, high-frequency trading platforms invest heavily in technology and infrastructure, including high-speed data networks and customised servers to optimise transaction speeds.
High-frequency trading firms are also exploring emerging technologies such as quantum computing. These powerful machines are capable of processing vast amounts of data and performing complex calculations at speeds that are orders of magnitude faster than traditional computers.
Importantly, the main characteristics of a high-frequency trading setup are speed and volume. Other key features include:
- Automation: High-frequency trading strategies are automated, with complex algorithms entering and exiting the market sometimes thousands of times a second.
- Data analysis: High-frequency trading firms use advanced data analysis techniques to identify market inefficiencies and generate signals. This can involve analysing vast amounts of historical data, as well as real-time market data.
- Low margins: High-frequency trading strategies typically operate on low margins, with profits generated by small price movements across a large volume of trades.
- Technology-driven: This method of trading is highly dependent on advanced technology, including low-latency trading infrastructure and powerful computing systems.
For Retail Traders
Technically, anyone can participate in high-frequency trading, but in reality, it is mostly limited to institutional investors and professional traders due to the high costs and advanced technology required.
Retail investors may not have the financial resources or access to the necessary infrastructure to engage in high-frequency trading. Additionally, the competition in the high-frequency trading market is intense, and success often depends on having access to proprietary data and market information, which may not be available to retail traders.
But whilst high-frequency trading is usually beyond the reach of small investors trading from home, there are some software options available for individuals.
One strategy is to use algorithmic trading software that provides signals based on set criteria or technical indicators. These signals can be used to automate trades using bots and execute orders quickly and efficiently.
Another option is to invest your money in funds or other financial products that deploy high-frequency trading strategies. However, these trading vehicles often come with high fees and large minimum investment requirements.
History Of High-Frequency Trading
High-frequency trading first emerged in the UK in the early 2000s, when firms began using computer algorithms to make fast trades.
In 2010, the “Flash Crash” occurred, during which the US stock market experienced a rapid and severe drop in prices. Many attributed this crash to high-frequency trading firms. Prices picked up again shortly after, but this event led to increased scrutiny of high-frequency trading systems around the world.
In recent years, the UK has seen the development of new trading venues and platforms, such as the London Stock Exchange’s Turquoise platform, which caters to the needs of high-frequency trading platforms and other high-volume traders.
High-frequency trading remains a significant force in the UK financial markets, with many firms using advanced algorithms to process vast amounts of market data from large databases, all in real time.
However, the use of high-frequency trading in the UK remains controversial, with some arguing that it can exacerbate market volatility and create an unfair leg-up for certain market participants, putting retail traders at a disadvantage as they lose out on the opportunity to capitalise on small price movements.
Regulations
The FCA has not made high-frequency trading illegal, but like other regulators, they have implemented rules to reduce the concerns surrounding market manipulation and other critiques. For example, its handbook sets out rules around market abuse, including manipulating prices or engaging in insider trading.
Additionally, MiFID II, first proposed in 2011 following the 2010 Flash Crash, was an update to the original 2007 MiFID rules, targeting high frequency trading. Under the new MiFID II definition, firms are required to provide detailed information about their trading activities, including the use of algorithms and high-frequency trading programs. This information must be reported to regulators in real-time, enabling them to monitor market activity and identify potential issues.
Pros Of High-Frequency Trading
- Market Liquidity: High-frequency trading firms provide liquidity and facilitate price discovery by acting as market makers. This is one of the biggest benefits of high frequency trading as market makers can help to reduce bid-ask spreads and allows traders to enter and exit positions more easily.
- Access To Dark Pools: HFT firms participate in dark pools which are private trading venues that are typically only accessible to institutional investors and large financial firms. They allow buyers and sellers to trade large blocks of shares anonymously, without disclosing the identity or size of their orders to the broader market. This can help to reduce market impact and improve execution quality.
- Market Stability: High-frequency trading can improve market stability by providing liquidity during periods of volatility or uncertainty. This can benefit retail traders by reducing the likelihood of market disruptions or flash crashes. Although some blame the Flash Crash of 2010 on high-frequency trading programs, this has since been debunked by the CTFC in 2014.
- ETFs: High-frequency trading can also benefit retail traders who invest in ETFs, as firms can help to ensure that prices remain closely aligned with the underlying assets through arbitrage. This can help to reduce tracking errors and improve overall returns.
Cons Of High-Frequency Trading
- Unfair Advantages: To participate in high-frequency trading, you must have access to fast and sophisticated trading technology, which is typically only accessible to large firms. This can create unfair advantages and allow them to extract profits at the expense of slower and smaller market participants.
- Complexity: High-frequency trading algorithms are complex and difficult to understand, making it harder for regulators and market participants to monitor and control the activities of such companies.
- Risk of System Failures: High-frequency trading firms rely heavily on technology, meaning they can be vulnerable to system failures and cyber attacks, causing significant disruption.
How To Compare Brokers That Offer High-Frequency Trading
- Network tools and infrastructure: Look for brokers that offer low latency connections to the financial markets, as well as high-speed servers and advanced network tools.
- Fees: High-frequency trading strategies involve executing a large volume of trades, so transaction costs can have a significant impact on profitability. Look for HFT brokers that offer competitive pricing with low to zero commissions, tight bid-ask spreads, and minimal slippage.
- Limit order books and quote data: HFT traders rely on real-time order book and quote data to execute trades quickly and efficiently. Brokers with access to real-time order books and customisable data flows will rank highly.
- Automation: The best high-frequency trading brokers offer automated apps, trading tools, robots and integration functionality to design, test and deploy HFT strategies. Many algorithms within the industry are designed with reliable programming languages such as Python or Java.
- Trading instruments: Consider the range of trading instruments available, including options, futures, forex and even cryptos such as Bitcoin. Note, some high-frequency trading brokers specialise in certain markets or asset classes.
- Rules: Due to the risks involved in high-frequency trading, some brokers may have certain criteria. For example, LMAX Exchange is a UK-based broker that specialises in forex trading. They require traders who want to engage in high-frequency trading to have at least £25,000 in capital and to demonstrate their knowledge and experience in HFT systems. They also require traders to sign a declaration of compliance with their high-frequency trading rules and regulations.
- Customer service: With high-frequency trading, every nanosecond counts, so access to a responsive customer support team 24/5 is important.
- UK regulation: The best high-frequency trading brokers for British traders are regulated by the Financial Conduct Authority. An FCA license adds credibility to a brand while ensuring what safeguarding initiatives should be in place to comply with law, such as segregated accounts and negative balance protection (for retail traders).
Specialist HFT Platforms
Specialist platforms for high-frequency trading include NYSE Arca, NASDAQ OMX, and CME Globex. CME Globex is particularly popular amongst high-frequency trading firms and is accessible to retail traders through specific brokers.
- CME Globex allows traders to choose from a range of advanced order types that are specifically designed for high-frequency trading, including iceberg orders, stop orders, and market orders.
- CME Globex is designed to provide fast and reliable access to global futures and options markets, with an average round-trip latency of less than 40 microseconds. This makes it a popular choice among high-frequency trading platforms looking to execute trades quickly and efficiently.
- CME Globex offers direct market access to its exchange, allowing high-frequency traders to bypass traditional brokers and connect directly to the exchange’s matching engine. This can help to reduce latency and improve execution times.
- CME Globex also offers co-location services, which allow high-frequency trading organisations to place their servers near the exchange’s matching engine. This can help to reduce network latency and improve execution times.
High-Frequency Trading Firms In The UK
In the UK, multiple firms implement high-frequency trading strategies to maximise profits. Some of the largest companies with offices in London, as well as New York, Amsterdam and Hong Kong are:
- Tower Research Capital: A global quantitative trading firm that uses HFT strategies to trade across a range of asset classes, including equities, forex, and futures. TRC has offices in London and other global financial centres.
- Optiver: A proprietary trading firm that also uses high-frequency trading systems. The company has been active in the UK since 2010 and has a significant presence in London.
- Jane Street: Active since 2013, Jane Street is a quantitative trading firm that uses advanced mathematical models and high-frequency trading strategies to trade various financial instruments, including stocks and forex.
Bottom Line On High-Frequency Trading
High-frequency trading systems are used by experienced traders and institutional investors such as hedge funds. But with the emergence of new technologies like quantum computing, high-frequency trading programs are increasingly becoming available to retail traders. To get started, see our list of the best high-frequency trading brokers.
FAQ
Can You Do High-Frequency Trading From Home?
The technology that underpins high-frequency trading systems requires a significant capital investment. Historically this has put high-frequency trading programs out of reach for retail traders. However, online brokers and trading platforms are increasingly offering better infrastructure for high-frequency trading setups, ensuring low latency.
What Are The Top 10 High-Frequency Trading Firms?
There are many firms that participate in high-frequency trading. Among the most well-known companies are Citadel Securities, Jane Street, Tower Research Capital, Two Sigma Investments, DRW Trading, Hudson River Trading, IMC Trading, Optiver, Flow Traders, and Quantlab Financial.
Can You Build Your Own High-Frequency Trading System?
You can start high-frequency trading from home, but building the right systems, technology and infrastructure required is expensive. Instead, many retail investors turn to the best brokers for high-frequency trading. These platforms offer tight data latency, low fees and sophisticated automated trading tools.
The top brokers and websites also offer useful educational materials, training guides and handbooks on high-frequency trading for beginners, including online courses, 101 tutorials, blogs, e-books, PDFs, research papers and academic journals, podcasts and key definitions.
Is High-Frequency Trading Good Or Bad?
High-frequency trading has been the subject of much speculation in the news, especially in terms of its impact on the financial markets and the environment. High-frequency trading firms can create liquidity and help ensure competitive fees, but it does favour institutional investors and large trading firms over retail investors.