High frequency traders
Over the high frequency traders few years, the equity markets underwent periods of high volatility high frequency traders as at the beginning ofowing to fears on the Chinese economy, and in June of high frequency traders same year, amid a climate of uncertainty brought about by the Brexit referendum. Such market conditions can affect liquidity: High frequency traders order to high frequency traders this trend, the AMF studied the activity of the leading operators engaged in HFT, who represent a large proportion of the market-making business on liquid Euronext Paris stocks.
The AMF conducted detailed analysis of the HFT activity over a nine-month period from November to Julyduring which there were high frequency traders swings in market volatility. The analysis focused firstly on the orders placed by HFTs and the liquidity provided in the order book, then on their transactions and how much liquidity they effectively provide and consume. High frequency traders the AMF The AMF is an independent public authority responsible for ensuring that savings invested in financial products are protected, providing investors with adequate information and supervising the orderly operation of markets.
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On an intraday basis, they enter the order book gradually and help to reduce the bid ask spread the difference between the best buy and sale prices at the beginning of the day, however they clearly reduce their presence in the order book ahead of announcements that are likely to affect share prices. On average, HFTs consume more liquidity than they provide, particularly during periods of high volatility. Overall market stress has a negative impact on liquidity and always results in shallower market depth.
Periods of intense stress prompt an increased presence of HFTs. In particular, their market share and liquidity consumption increase sharply following announcements that impact the stock market.