Advanced trading platforms

Advanced computerized trading platforms and market gateways are becoming standard tools of most types of traders, including high-frequency traders. Broker-dealers now compete on routing order flow directly, in the fastest and most efficient manner, to the line handler where it undergoes a strict set of risk filters before hitting the execution venue(s). Ultra-low latency direct market access (ULLDMA) is a hot topic amongst brokers and technology vendors such as Goldman Sachs, Credit Suisse, and UBS. Typically, ULLDMA systems can currently handle high amounts of volume and boast round-trip order execution speeds (from hitting "transmit order" to receiving an acknowledgment) of 10 milliseconds or less.

Such performance is achieved with the use of hardware acceleration or even full-hardware processing of incoming market data, in association with high-speed communication protocols, such as 10 Gigabit Ethernet or PCI Express. More specifically, some companies provide full-hardware appliances based on FPGA technology to obtain sub-microsecond end-to-end market data processing.

Buy side traders made efforts to curb predatory HFT strategies. Brad Katsuyama, co-founder of the IEX, led a team that implemented THOR, a securities order-management system that splits large orders into smaller sub-orders that arrive at the same time to all the exchanges through the use of intentional delays. This largely prevents information leakage in the propagation of orders that high-speed traders can take advantage of. In 2016, after having with Intercontinental Exchange Inc. and others failed to prevent SEC approval of IEX's launch and having failed to sue as it had threatened to do over the SEC approval, Nasdaq launched a "speed bump" product of its own to compete with IEX. According to Nasdaq CEO Robert Greifeld "the regulator shouldn't have approved IEX without changing the rules that required quotes to be immediately visible". The IEX speed bump—or trading slowdown—is 350 microseconds, which the SEC ruled was within the "immediately visible" parameter. The slowdown promises to impede HST ability "often to cancel dozens of orders for every trade they make".

Outside of US equities, several notable spot foreign exchange (FX) trading platforms—including ParFX, EBS Market, and Thomson Reuters Matching—have implemented their own "speed bumps" to curb or otherwise limit HFT activity. Unlike the IEX fixed length delay that retains the temporal ordering of messages as they are received by the platform, the spot FX platforms' speed bumps reorder messages so the first message received is not necessarily that processed for matching first. In short, the spot FX platforms' speed bumps seek to reduce the benefit of a participant being faster than others, as has been described in various academic papers.