# Which Model Is Generally Better Suited for High-Frequency Trading and Why? ⎊ Path

**Published:** 2025-12-05
**Author:** Greeks.live
**Categories:** Path

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## Which Model Is Generally Better Suited for High-Frequency Trading and Why?

The Central Limit Order Book (CLOB) model is generally better suited for high-frequency trading (HFT). HFT relies on rapid order placement, cancellation, and matching, which the CLOB is specifically designed for.

AMMs, especially those on blockchains with slower block times, introduce latency and are susceptible to Miner Extractable Value (MEV) issues, making them less ideal for the speed and precision required by HFT.

- [What Is the Significance of ‘Co-Location’ in HFT Infrastructure?](https://learn.greeks.live/path/what-is-the-significance-of-co-location-in-hft-infrastructure/)

- [How Does High-Frequency Trading (HFT) Relate to Spoofing Allegations?](https://learn.greeks.live/path/how-does-high-frequency-trading-hft-relate-to-spoofing-allegations/)

- [Contrast the AMM Model with the Traditional Central Limit Order Book (CLOB)](https://learn.greeks.live/path/contrast-the-amm-model-with-the-traditional-central-limit-order-book-clob/)

- [What Is ‘High-Frequency Trading’ (HFT) and Its Relation to Latency?](https://learn.greeks.live/path/what-is-high-frequency-trading-hft-and-its-relation-to-latency/)

- [What Is the Primary Function of a Matching Engine in a Crypto Exchange and How Can Its Design Prevent Front-Running?](https://learn.greeks.live/path/what-is-the-primary-function-of-a-matching-engine-in-a-crypto-exchange-and-how-can-its-design-prevent-front-running/)

- [What Is ‘Latency’ and Why Is It a Critical Factor in HFT Profitability?](https://learn.greeks.live/path/what-is-latency-and-why-is-it-a-critical-factor-in-hft-profitability/)

- [How Does Latency Affect Execution Quality on Both RFQ and CLOB Platforms?](https://learn.greeks.live/path/how-does-latency-affect-execution-quality-on-both-rfq-and-clob-platforms/)

- [How Is Transaction Latency on a Blockchain Analogous to Market Data Feed Speed in Traditional High-Frequency Trading?](https://learn.greeks.live/path/how-is-transaction-latency-on-a-blockchain-analogous-to-market-data-feed-speed-in-traditional-high-frequency-trading/)

## Glossar

### [Central Limit Order Book](https://learn.greeks.live/area/central-limit-order-book/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Aggregation ⎊ This mechanism collects all outstanding buy and sell orders into a single transparent ledger.

### [Miner Extractable Value](https://learn.greeks.live/area/miner-extractable-value/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Extraction ⎊ Miner Extractable Value refers to the profit a miner or validator can gain by strategically including, excluding, or reordering transactions within a block they are building, often exploiting knowledge of pending transactions in the mempool.

## Discover More

### [How Do High-Frequency Trading Algorithms React to Mass Margin Calls?](https://learn.greeks.live/path/how-do-high-frequency-trading-algorithms-react-to-mass-margin-calls/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Do High-Frequency Trading Algorithms React to Mass Margin Calls?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Finance-Volatility-Surface-Modeling-Through-High-Frequency-Trading-Chronometers.webp)

HFTs widen spreads, front-run liquidation orders, and execute rapid short sales, intensifying the market crash.

### [How Often Should an Oracle Update for a High-Frequency Trading Derivative?](https://learn.greeks.live/path/how-often-should-an-oracle-update-for-a-high-frequency-trading-derivative/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Often Should an Oracle Update for a High-Frequency Trading Derivative?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Execution-in-Decentralized-Finance-Mechanism-Modeling-Through-Time-Locked-Derivatives.webp)

As frequently as blockchain latency and gas costs allow, typically every few seconds or upon meeting a small deviation threshold (e.g. 0.1%).

### [How Does Low Transaction Throughput Impact High-Frequency Trading of Derivatives?](https://learn.greeks.live/path/how-does-low-transaction-throughput-impact-high-frequency-trading-of-derivatives/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does Low Transaction Throughput Impact High-Frequency Trading of Derivatives?](https://learn.greeks.live/wp-content/uploads/2025/10/Hydrodynamic-Equilibrium-of-Tokenized-Assets-on-a-High-Frequency-Trading-Surface.webp)

Low throughput causes high latency and slippage, making the rapid execution and market data updates required for high-frequency trading unviable.

### [Why Is Instant Finality Critical for High-Frequency Trading of Financial Derivatives?](https://learn.greeks.live/path/why-is-instant-finality-critical-for-high-frequency-trading-of-financial-derivatives/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Is Instant Finality Critical for High-Frequency Trading of Financial Derivatives?](https://learn.greeks.live/wp-content/uploads/2025/10/Deconstructed-Mechanism-Illustrating-Asymmetric-Risk-Payoff-Structures-in-Decentralized-Finance-Derivatives-Execution.webp)

It eliminates the time gap for trade reversal, ensuring immediate settlement and execution certainty, which is vital for automated arbitrage strategies.

### [How Can a High-Frequency Trader Detect a Basic TWAP Order?](https://learn.greeks.live/path/how-can-a-high-frequency-trader-detect-a-basic-twap-order/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Can a High-Frequency Trader Detect a Basic TWAP Order?](https://learn.greeks.live/wp-content/uploads/2025/10/Asymmetric-Hedging-Structures-Manifesting-Fan-Folding-in-Digital-Asset-Derivatives-Market-Dynamics.webp)

HFTs detect basic TWAP orders by observing consistent, periodic patterns in trade size and timing from the same source.

### [Why Are TWAP Oracles Less Suitable for High-Frequency Trading Platforms?](https://learn.greeks.live/path/why-are-twap-oracles-less-suitable-for-high-frequency-trading-platforms/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Are TWAP Oracles Less Suitable for High-Frequency Trading Platforms?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Autonomous-Organization-Governance-Structure-High-Frequency-Algorithmic-Trading-Mechanism-Visualization.webp)

TWAP intentionally lags the real-time price by averaging data over time, which is detrimental to strategies requiring instantaneous market prices.

### [Which Margin Type Is Generally Better for Risk Management for a Novice Trader?](https://learn.greeks.live/path/which-margin-type-is-generally-better-for-risk-management-for-a-novice-trader/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Which Margin Type Is Generally Better for Risk Management for a Novice Trader?](https://learn.greeks.live/wp-content/uploads/2025/10/Stochastic-Volatility-Equilibrium-Modeling-of-Decentralized-Finance-Option-Hedging-Instruments.webp)

Isolated margin, as it limits the potential loss to the specific collateral allocated to that single position.

### [Which Response Is Generally Preferred to Maintain the Position?](https://learn.greeks.live/path/which-response-is-generally-preferred-to-maintain-the-position/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Which Response Is Generally Preferred to Maintain the Position?](https://learn.greeks.live/wp-content/uploads/2025/10/Metallic-Actuator-Array-Mechanism-Exemplifying-Decentralized-Exchange-Automated-Market-Maker-Calibration-Protocols.webp)

Adding funds is preferred to maintain the full position, while partial closure is preferred to reduce risk or when funds are limited.

### [How Does a High Margin Call Frequency Affect Market Volatility?](https://learn.greeks.live/path/how-does-a-high-margin-call-frequency-affect-market-volatility/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a High Margin Call Frequency Affect Market Volatility?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Finance-Synthetic-Asset-Collateralization-Mechanism-Unveiling-Layer-Two-Settlement-Finality.webp)

High margin call frequency forces concentrated selling to post collateral or face liquidation, creating a cascading 'liquidation spiral' that increases volatility.

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**Original URL:** https://learn.greeks.live/learn/which-model-is-generally-better-suited-for-high-frequency-trading-and-why/
