High frequency trading has a positive impact on the structure and performance of global capital markets by adding liquidity and reducing price volatility, according to recent academic research that allays some of the popular and political concerns over the trading strategy.

The independent research, published by Australian research institution the Capital Markets Cooperative Research Centre, found that HFT firms are net providers of liquidity - meaning they more frequently provide quotes for stocks than they 'hit' - and can in some cases help to reduce the volatility of stock prices.