High Frequency Trading: Optimal Behavior Analysis

This lecture delves into the analysis of optimal trading behavior for individuals with access to high frequency signals in financial markets. The instructor explores the equilibrium dynamics of trading behavior, pricing adjustments, liquidity, and volatility in the presence of informed traders. By examining the impact of high frequency signals on trading strategies, market efficiency, and price discovery, the lecture challenges common assumptions about the behavior of high frequency traders and their contribution to market dynamics.