In Depth: The Murky World of High-Frequency Futures Trading in China

There is a mysterious force at play in China’s futures market — high-frequency traders.

They are mostly very low-profile inside China, operating under the guise of trade companies that buy and sell physical goods, and are said to be making huge profits. But outside China, they are associated with big-name high-frequency traders.

One such example is Yue Shen Industrial (Shanghai) Co. Ltd., an entity often with the highest trading volumes of some contracts on the Dalian Commodity Exchange. Yue Shen (跃申) is effectively controlled by Jump Trading Group, a globally well-known proprietary trading firm with a focus on algorithmic and high-frequency trading strategies. In Chinese, the “Yue” in the company name means “Jump,” while the “Shen” is another name of Shanghai.