High-Frequency Trading (HFT)
Automated trading that uses speed and algorithms to execute huge numbers of orders in microseconds.
HFT firms co-locate servers next to an exchange's matching engine and fire thousands of orders a second, profiting from tiny price gaps that vanish almost instantly. They provide liquidity and tighten spreads, but they also win simply by being faster than everyone else.
In crypto, the on-chain version is MEV, where bots reorder or front-run transactions in the mempool for the same edge. Retail traders can't compete on speed and shouldn't try.
Related terms
Profit that block producers can capture by choosing how to order or insert transactions within the blocks they build.
Front-RunningProfiting by seeing a pending transaction and pushing your own ahead of it for guaranteed gain.
ArbitrageProfiting from the same asset trading at different prices in two places by buying low and selling high.
Taker FeeThe fee charged when your order removes liquidity by filling immediately against the book.