How Does High-Frequency Trading Actually Make Money? The Algo Community Explains
How Does High-Frequency Trading Actually Make Money? The Algo Community Explains TL;DR High-frequency trading (HFT) firms make money through razor-thin margins executed at massive scale — think fractions of a cent per trade, multiplied millions of times per day. The r/algotrading community on Reddit recently dug into exactly how this works, surfacing a surprisingly nuanced picture. It’s not just about being “fast” — it’s about statistical edges, market microstructure exploitation, and infrastructure advantages that most retail traders can’t replicate. If you’ve ever wondered why your limit order got picked off the moment you placed it, this article is for you. ...