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Joe Saluzzi Discusses High Frequency Trading And Volatility

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Joe Saluzzi Discusses High Frequency Trading And Volatility

  • Joe Saluzzi was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick. Tune in to the daily broadcast live Monday-Friday at 8 a.m. ET here.
  • Saluzzi, partner and co-founder of Themis Trading, discussed several issues during the show, including his firm’s history, his book, the IEX dark pool and high frequency trading.
  • Saluzzi's expertise regarding HFT is widely respected within the space.
  • During a recent guest appearance on Benzinga's #PreMarket Prep show, Joe Saluzzi was asked about high frequency trading (HFT) and "Flash Boys," a book that many attribute to putting HFT on the map. "Flash Boys" and Scott Patterson's "Dark Pools" are highly regarded as a good place to start learning about HFT.

    High Frequency Trading, Volatility And Risk

    At one point in the interview, the expert was asked about risk and high frequency trading. Questions asked included: Are high frequency traders involved in risky moves? Are they trading stocks moving 10 or 20 percent in just a matter of a few seconds -- like we’ve been seeing in the biotech space recently?

    Related Link: A Day In The Life Of A High-Frequency Trader

    But, high traders do like volatility, Saluzzi explained. Saluzzi pointed out that seeing quotes faster – a direct result of volatility, allows traders to benefit from “a system that’s better than most others out there.” He elaborated further, “Then, the more that that quote moves, the better I’m going to be able to buy on the bid or sell on the offer or whatever it may be.”

    So, high frequency traders’ system “relies on that type of volatility; they make their most money on volatile days,” he went on to expound. “So I can imagine in ’07 and ’08 how well they were doing.”

    In conclusion, high frequency traders are not volatility-averse, but “they do manage their risk carefully,” Saluzzi assured.

    Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

    Image Credit: Public Domain

    Posted-In: #PreMarket PrepEducation Short Ideas Exclusives Movers Trading Ideas Interview General Best of Benzinga

     

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