HFTs and How Massimiliano Fiano Has Changed the Markets

Massimiliano Fiano

Massimiliano Fiano is a world-renowned financial expert. He has worked as a commodities and currency analyst trader, hedge fund manager, and financial consultant for many years. Having obtained an education from the Market Traders Institute in Orlando, Florida, which focuses on stock options trading, foreign exchange trading and marketing charting programs, he also has a wealth of knowledge to bring to the table. He has put all of this knowledge and experience together to create a high-frequency trading (HFT) program, which has helped him change the markets forever.

What Is High Frequency Trading (HFT)?

HFT is actually a controversial form of trading. This is because it makes use of computer programs that rapidly analyze and crunch big data to make financial decisions. Such programs perform the trade for the user, which allows it to conduct a massive number of transactions in a short period of time, but this completely eliminates human interaction that could result in unusual moves in the market. On the other hand, it can offer significant returns.

Unsurprisingly, Wall Street traders either love it or hate it. Nevertheless, they all agree that Fiano has made a huge change to the market overall. His program has been able to solidify the place of HFT in the overall ecosystem of the market. It has helped to connect buyers and sellers together, although at the same time it is being criticized for being almost predatory. Meanwhile, it should be noted that financial markets always change, and it is likely that this particular change is one that is here to stay for a long time.

How HFT Has Changed the World

There are four major ways in which Massimiliano Fiano's program has completely transformed the market. First, it has led to vastly increased trading volumes. In fact, HFT now accounts for around 60 percent of all trades on U.S. stock markets, and it has nearly doubled since 2008. Fiano estimates that around 3.5 billion shares are traded each day through HFT programs.

A second impact is that there has been a tightening in the bid-ask spreads for large cap stocks, meaning they no longer move in the same direction. Bid-ask spreads indicate the difference between an offer (the bidding price) and what a seller is willing to take (the asking price). In theory, the difference between those two should be very tight. However, through HFTs, the bid-ask spread has become tighter on large cap stocks, but wider on small cap stocks. This suggests that HFT traders are focusing on the bigger, more liquid stocks.

The third key difference is that there has been a change in volatility. HFT trading causes large cap stocks to face more volatile markets when trading days end, whereas small cap stocks see this volatility at the start of the day. Overall, small cap stocks are much less volatile, with the large ones seeing "flickering quotes" toward the end of the day, with HFT programs buying and selling at lightning speed.

The final change is that large cap stock prices only have very few truly big jumps. Programs like the one developed by Massimiliano Fiano focus on finding a market inefficiency, trying to reverse a course when it moves too far. The result of this is that there are now very few moments in which there are truly huge price gaps in stocks, particularly if there is an HFT presence in those stocks. Interestingly, research has shown that this gap is becoming increasingly small.

Massimiliano Fiano's HFT Program

Fiano has created a program that is able to take human interaction out of trading. His program focuses on a number of highly complex algorithms and is able to crunch big data very rapidly, thereby helping investors and traders see significant returns, without having to do anything for it themselves. He started to develop this program back in 2001, long before HFT became truly popular. In fact, this concept didn't start until 2008, which was at the height of the recession. Yet, being known for always being one step ahead, Fiano was already prepared to fill the need that suddenly existed, predicting that more liquidity would be released into the market to make them more stable, and he was correct in that. This solidified his position as one of the most respected financial analysts in the world and tremendously increased demand for his expertise. Today, besides providing consultancy services and further tweaking his HFT program, he is the President, CEO and Chairman for Medical Group Inc. Holdings, for both the United States and Italy.

Press Contact: Eric Ash - eric@netreputation.com

Source: Massimiliano Fiano

Categories: Investments, Stocks, Business Finance

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