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Demystifying High-Frequency Trading

High frequency trading has gotten a lot of press recently, specifically flash trading, and much of that has been negative. How can you play the backlash? Rishi Narag of Telesis Capital specializes in high frequency trading and he’s giving the traders his perspective on the situation.

Flash trading could potentially be an extremely profitable business, but most high frequency traders don’t engage in it, Narang says. There’s a big misconception that high frequency trading and flash trading are synonymous, which is wrong, he says.

In the even that high frequency trading is impeded in any significant way, Narang sees big investment firms like Goldman Sachs being extremely affected, and the market in general suffering as a large pipeline of liquidity could potentially be damaged.

For this top trader’s full insight of high frequency trading and outlook on how any changes could affect the broader market, check out the video!


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Trader disclosure: On Aug. 10th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Najarian Owns (C) Calls, Owns (CSCO) And Is Short (CSCO) Calls, Owns (FCX), Is Short (FCX) Calls, Owns (FCX) Puts; Owns (GS), Is Short (GS) Calls, Owns (GS) Puts; Owns (INTC) And Is Short (INTC) Calls; Owns (JPM) And Is Short (JPM) Calls; Owns (MCD) Call Spread; Owns (MS) And Is Short (MS) Calls

Najarian Owns (MSFT) And Is Short (MSFT) Calls; Owns (PALM) Call Spread; Owns (TCK) Call Spreads; Owns (TIBX) Calls; Owns (YHOO) Call Spread; Terranova Owns (AMZN), (MCD), (MSFT), Is Short (F), Terranova Works For (VRTS)

Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO

Virtus Diversifier PHOLIO Owns (IGE)
Virtus Diversifier PHOLIO Owns (DBC)
Virtus Diversifier PHOLIO Owns (DBV)

Virtus Investment Partners Owns More Than 1% Of (ABD)
Virtus Investment Partners Owns More Than 1% Of (CAL)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBC)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (SKT)
Virtus Investment Partners Owns More Than 1% Of (TNB)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (CLB)

Narang's Fund Is Short (NYX) And Is Long (NYX) Calls And Puts
Narang's Fund Owns (NDAQ) And Is Long (NDAQ) Calls And Puts
Narang's Fund Is Short (GS) And Is Short (GS) Calls And Puts

Stutland Is Short (EEM) Puts

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