How HFT Saves Investors Money
A “spread” is the price difference between the buyer and seller when negotiating a sale. The narrower the spread, the lower the transaction cost for investors – such as pension funds, endowments, 401k holders, and savers save more money on trading the lower the spread. The larger the “spread” – or the – difference - the greater the compromise and the worse the final price will likely be for both parties.
HFT saves investors money by reducing the spread by using technology to continuously surveil the market and align pricing across venues. By doing this, HFT saves investors hundreds of millions of dollars for their retirement and other savings accounts.