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20 Oct 2012 (AFR) – Decipher the fast-trade static

(20 Oct 2012, AFR, John Wasiliev)

‘A battle is taking place in the Australian sharemarket between investors and traders that all investors should understand, given the potential for them to be caught up in it. The tussle is between mainly larger investors like fund managers and a breed of speculators who engage in what is described as high-frequency trading (HFT).’

‘Most investors – including fund managers – buy shares to hold for their dividends, dividend imputation franking credits and eventually some capital gains. Most speculators buy or sell share derivatives like contracts for difference, mini warrants and exchange-traded options for short-term-leveraged profits.’

‘But high-frequency traders are another market group entirely.’

Read more at AFR.com (might need AFR login access)

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Brainy's Share Market Toolbox. Read the honest truth about the sharemarket. Develop or fine tune your investing/trading strategies using share price charts (technical analysis), or learn about the investment strategies of others. Melbourne (Australia) based - supporting share market investors and traders to build wealth through smarter investing using my Share Market Toolbox arsenal of weapons to tackle the market.

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