New York, NY -- (SBWIRE) -- 07/27/2011 -- It was reported in Amsterdam Trader that Financial Times’ Jeremy Grant had asked for an industry insider to throw some light on high-frequency trading (HFT). Several traders responded, but the award for explaining HFT in an easy way was won by Robin van Boxsel, Remco Lenterman and Tim Edwards from IMC. Traders who are not satisfied with this layman’s terms explanation can count on Golden Networking’s High-Frequency Trading Experts Workshop DVD Video Package, "Practical Implementation of High-Frequency Trading Strategies", now on DVD at http://www.HFTExpertsWorkshop.com, to provide further light on this emerging subject.

This is how the IMC team explained high-frequency trading: "Essentially, a market maker provides liquidity, which we believe is positive within financial markets, if not a fundamental condition of them. Speed is an essential tool for market makers to manage risk by controlling the amount of time that their quotes are placed on an exchange. This is commonly referred to as exposure time. For every quote in the market that a market maker provides, they are exposed to that quote for the time it takes for a cancellation to be processed, or the time it takes to remove the exposure following a market move or a move in a related instrument."

"Basically the higher the speed, the lower the time between when information is received and the time when such information is incorporated into prices. For any given order, the value of this fraction of a second exposure is very low. However, across an entire market venue, this adds up to very large numbers. In the cases where exchange speeds are high, it enables market makers to manage their risk better and therefore they are willing to quote narrower spreads and for bigger size. The relationship between speed, spread and liquidity is evident on many exchanges and clearly adds value to all participants. It is clear that in the past 10 years, major markets have become substantially more liquid with narrower spreads and lower transactions costs. Speed has played an essential role in this development. A case in point is that markets that continue to have slow systems and/or low bandwidth have very little displayed liquidity (Hong Kong, Australia, Osaka Stock Exchange) and that in order to facilitate increased liquidity, they need to change these systems, which is happening."

They concluded: "The role of an exchange is to supply a venue for buyers and sellers to access securities. This is the core of capital formation, spreading risk from those who cannot bear it to those who seek it. Market makers even out the distribution of risk through portfolio management, and give liquidity where there is not a natural counterparty.

Exchanges are providing exactly the service we expect of them by increasing speeds and lowering order acknowledgement times, aiding market participants to provide the liquidity we expect to be available in a market centre. We hope we have been able to shed some light on this subject."

High-Frequency Trading Experts Workshop DVD Video Package was produced by Golden Networking (http://www.goldennetworking.net), the premier networking community for business executives, entrepreneurs and investors. Golden Networking has compiled the insights of top experts and industry practitioners and produced DVD Video Packages for its Leaders and Experts Forums, including:

• 2nd China Leaders Forum DVD Video Package, "Is the Chinese Dragon Poised for Global Dominance or Economic Implosion?", http://www.ChinaLeadersForum.com
• Distressed Investing Experts Forum 2010 DVD Video Package, "Analyzing and Valuing Distressed Companies, Securities and Real Estate", http://www.DistressedInvestingExpertsForum.com
• Derivatives Leaders Forum 2010 DVD Video Package, "Strategies for Increasing Profits under an Evolving Regulatory Framework", http://www.DerivativesLeadersForum.com
• High-Frequency Trading Leaders Forum 2010 DVD Video Package, "Innovating and Profiting from High-Frequency Trading in 2010 and Beyond", http://www.HFTLeadersForum.com
• Hedge Funds Leaders Forum 2010 DVD Video Package, "Generating Alpha in Challenging Times", http://www.HedgeFundsLeadersForum.com
• High-Frequency Trading Experts Forum 2010 DVD Video Package, "Starting and Running a High-Frequency Trading Operation", http://www.HFTExpertsForum.com
• Distressed Investing Leaders Forum 2010 DVD Video Package, "Extraordinary Opportunities Investors Cannot Afford to Pass", http://www.DistressedInvestingLeadersForum.com
• China Leaders Forum 2009 DVD Video Package, "Addressing the Challenges Posed by the Present Wave of Chinese Globalization", http://www.ChinaLeadersForum.com
• Distressed Investing Leaders Forum 2009 DVD Video Package, "The Most Comprehensive Guide for Any Investor in Distressed Assets", http://www.DistressedInvestingLeadersForum.com

Panelists, speakers and sponsors are invited to contact Golden Networking by sending an email to info@goldennetworking.net. Golden Networking has been frequently featured in the press, including recent articles in The Wall Street Journal, "Happy Hour for High-Frequency Trading", The New York Times, "Golden Networking Helps Job Seekers Make Overseas Connections", Los Angeles Times, "Speed-addicted traders dominate today's stock market", Reuters, "Revamp looms as trading experts huddle at SEC" and Columbia Business School's Hermes Alumni Magazine, "10 Under 10".