Miami, Florida, July 24, 2017 (Newswire.com) - Massimiliano Fiano is a highly respected hedge fund manager, has made his mark as a financial consultant across the world. At present, he works as a currency analyst and commodities trader, providing advice and guidance to companies and individuals the world over. One of his unique achievements is that he was able to develop a High-Frequency Trading Program (HFT) that is able to work completely independently.
Massimiliano Fiano's HFT Program
Fiano started developing his HFT program in 2001. He wanted to create something that people could have running in the background that focuses on low-risk trades. Over the years, he has slowly perfected the system with the result that today, those who use it can expect to see daily returns of between 3% and 4%. Considering that between 60% and 70% of all stock trades in this country are high-frequency trades, this is quite an achievement.
It should be noted that HFT in itself is nothing new. Many people now use programs that enable them to very rapidly perform a large number of transactions. However, Massimiliano Fiano's HFT uses one of the most complex algorithms around, analyzing various different markets and executing relevant orders based on the market conditions. Few HFT programs work truly independently, as speed is of the essence. This is precisely what makes Fiano's program different.
A Brief History of HFT
Various exchange markets have started to offer incentives to various companies to allow trading in their liquidity. This started when the Lehman Brothers collapsed in 2008. Over time, this has made HFT trading a lot more popular, and it has, in fact, changed the market as a whole. The New York Stock Exchange (NYSE), for instance, now has Supplemental Liquidity Providers (SLPs) in place, which makes existing quotes more competitive. Those who agree to provide this liquidity receive a rebate or fee for doing so, standing at $0.0019 per SLP on the NYSE. While this looks like a very small amount, HFTs account for millions of transactions each day, with that fee being paid each time.
The Advantage of HFT
The key advantage of HFT trading is that liquidity on the market has improved, eliminating the bid-ask spreads that were too tiny to make a difference. Indeed, the NYSE had tested this by charging fees for HFT, which resulted in an increase in the bid-ask spreads. A similar experiment was conducted in Canada, where there was a 9% increase in bid-ask spreads when the government charged fees for HFTs.
The Disadvantage of HFT
HFT has received a significant criticism as well, not in the least because it makes decisions based on algorithms and mathematical calculations, rather than human interaction and decisions. This has led to some strange market changes, such as the Dow Jones Industrial Average (DJIA) seeing a 10% decline in a 20 minute time period. It was able to recover after that but it was later found that this was due to a gigantic order, which does demonstrate that this kind of trading can make the markets more volatile.
How Fiano's HFT Program Is Different
Like other HFT programs, Fiano's model is based on complex algorithms, but the program is also able to make incredibly quick transactions, which is the most important thing in successful HFT trading. The faster a transaction is performed, the higher the potential for profit, essentially beating manual traders to it. Fiano's program is able to monitor multiple markets simultaneously to predict the right trading times.
It is, in essence, a big data analytics system that is able to accurately spot the dip in prices that occurs when large amounts of shares are sold. Within minutes, this dip will recover again, giving people the opportunity to experience significant profits. The 3.5% average return that his program offers is unsurpassed by any other of its kind.
However, Massimiliano Fiano would like to warn that people should understand just how complex HFT trading is. With so many HFTs on the market, and so many potential factors influencing a dip, it can be hard to determine whether share or stock will recover, or whether it is on the road to disaster. Nevertheless, his program is able to do this with surprising accuracy, particularly when considering that it looks at all futures, options, bonds, stocks, and commodities. Indeed, powerful computers are required to be able to perform an analysis of this scale and at this speed.
What Fiano has been able to do with his program is making the world of HFT trading accessible to anybody. Thanks to his precise modeling and speed of processing, he has made the market accessible to everyone, thus making the market fairer overall.
Source: Massimiliano Fiano
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