E Did HFT Traders Benefit The Most Out Of The GameStop Saga?

For those, who got acquainted with the innovations happening around the financial market, those two terms should not be a newcomer. However, it is difficult to keep up with all those new methods that we are offered, and first, let’s try to make them clear to find the valid correlation between them. 

What is Gamestop and what happened to it?

Gamestop is an American shop that sells games, consoles, and many other electronic devices. As well as many other companies, Gamestop (GME) was also undergoing big financial troubles due to the global financial crisis which itself is caused by the coronavirus pandemic. 

Here to mention the platform Reddit (which spent its whole commercial funds for the 5-second commercial during the Superbowl), which is more like Twitter or Facebook, where a lot of events are discussed. One of them is trading on the financial market and values of stock and shares and where they are going to start investing. 

Those who are actively involved in stocks and shares, often predict which company is more likely to go down in price or increase. You got it right. GameStop was one of the companies, which hedge funds had bet it would lose its value. However, not everything went as it was predicted to go.

A lot of people, from the Reddit platform, decided to buy shares of Gamestop and as a result, the demand was raised and the price went up massively. 

Image Source: Unsplash

What does HFT mean?

The acronym HFT stands for - High-frequency Trading which is an automated platform, used by large investors, hedge funds to transact plenty of the orders at the highest speed. We can boldly say that it is profitable and expensive, simultaneously, not to mention its hassles and limited space. HFT trading is often mistakenly confused with trading robots, although these are completely different things. Trading robots are computer programs where the maximum and minimum expected prices are indicated and executes the trade itself, while the trade in the case of FHT strategy, is made by the traders themselves. 

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