What Is HFT Market Making?

As we have discussed in our earlier articles, the idea of market making is nothing but competing for the lowest bid-ask spread by having the updated data about the public information regarding the demand and supply for a particular security. The HFT market making is also quite same. But the way in which the market makers react for the market data will be different in case of HFT. The high speed data transmission in the HFT will never let the marketer to wait for the data and also will not wait much time for his response. Everything in HFT acts so fast and the decisions must be taken immediately.

Complex Orders and Their Types – Part 2

Many market place systems nowadays are including the support for some complex and special purpose orders. The special purpose orders can be used to implement both the alpha preserving and alpha creating algorithms. Many market places operators have different perspective on having such an option in their venues. Some of their reasons are

• Some of the algorithmic trading strategies can be implemented in a more efficient way if a special purpose order is used.
• By making use of the special purpose orders, the flow of total transaction is lowered and it results in low handling cost.
• On a comparative basis, the functionality of an algorithm is superior in case of the special purpose order than the standardized orders.
• The special purpose orders cause more liquidity in the market.
• The execution risk is removed by the special purpose orders as it offers atom level complex operations.

Strategy Orders

The strategy order is also known as combination order. The strategy order or a combination order will make it possible for the end user to make a combined order. The combined order will look something like this “Buy the X and Sell the Y for a net price of Z”. From the perspective of the algorithmic trading, these types of orders can make the implementation of certain type of algorithms very easy. For instance, so many arbitrage strategies can be expressed easily with the help of combined orders. This will effectively remove the arbitrage possibilities.

For implementing the combination orders in a better way, the market places will usually support the following features:

• Virtual orders are generated in the underlying order books.
• With no execution risk, atomic level execution of the combination order is supported.

Linked orders

It is exactly an opposite of the strategy order in case of its concepts. One order will be linked with the other one in any aspect. Both the legs will be having their individual price and volumes. But when one of the leg volumes is reduced, then the other one also will get reduced proportionally. The linked orders are used to lessen the problems that often arise in case of the alpha creating algorithms. If the marketer is getting a trade on one of the instrument, then he must have to make the changes in the quotes of the other instrument also. If the market maker is making use of the linked orders, then the need of updating is no further required. The market maker can now make a better spread by considering just one instrument at a time.

To know this more in detail, it will be better if you take a certificate in quantitative finance in Singapore from a good trading institute. If you are looking out for a quantitative finance career, then it is better to go with a leading institute that offers the best quantitative analysis course. They also offer jobs for the deserving candidates and they are good in offering a global exposure to their students.

Complex Orders and Their Types – Part 1

Many market place systems nowadays are including the support for some complex and special purpose orders. The special purpose orders can be used to implement both the alpha preserving and alpha creating algorithms. Many market places operators have different perspective on having such an option in their venues. Some of those reasons are

Gopro’s IPO Is Under Water Now

GoPro’s shares in the IPO which was traded in the symbol GPRO is now in sales at a very low price. Previously the company shares were sold at a price of $98 each. But now the shares were sold at a price of $24 each. This is considered as the lowest price that the company shares have ever seen after getting into IPO. The marketers said that the market volatility is the major cause for the down fall of the share price. The price of GoPro shares was slipping since august. The investors have shown their grin regarding the fall of GoPro share price.

5 Main Option Trading Strategies

Option is the choices that an investor has while playing in the market. It is more to be called as a securities contract which will be giving you the right to make a call (buy) or put (sell) the index, underlying equities or even the ETF. This is to be done in the predetermined time i.e. before the expiration date, which is called as the preset time period in market terms. Also it is must to have the strike price for the call or put, which is nothing but the predetermined price for what is being bought or sold.

Dark Pool – The New Algo Trading Strategy

Algorithmic trading has already revolutionized the whole world market. At this scenario it is important for everyone to know various strategies that are playing well in the algorithmic trading. Especially it is must for investors who make bulk investments in the market believing the algorithmic trading. But when it is about bulk investments, the major issues what the investor face is the transparency. The investor being open about his trade in the market will let him get cheated easily by the black marketers. Hence it is important for them to hide their trade. Dar pool is the best strategy to hide these trade details of an investor from other marketers.

Things to Know about AT for Retail Traders

This article is all about sharing the ideas about the average retailers to maintain a level in their playing field. After all it is must for every marketer and business men to have their own benchmark in their field so as to be recognized by others as successful. Equametrics is a company that was specialized in getting the automated trading power that can be widely used by banks and the retail investors. It is quite sure that anyone will accept the success of this automated trading discipline that goes with the large investors and retailers. But in the case of the average retailers or investors, it is not sure at all that they will have the ability to maintain, implement and develop such automated strategies successfully.

In spite ofbeing a proposer of trading in electronic platform, the customized algorithms that have been used by the hedge funds and banks are not off shelf indicators. These customized algorithms are usually available with the major companies that develop electronic trading platforms. The very common off shelf indicators are the 200 days average movement and the MACD and those were the great tools for garnishing an immediate snapshot of the market’s current state. Well some advices that was shared by prominent marketers for the average retailers and investors to do better with the electronic platforms are

• The canned indicators or simply termed as off shelf indicators will never work like the automated trading strategies.
• The input of a standard indicator usually needs notifications that are combined with the input variables and the custom indicators. This is just a way of producing a profitable strategy for a long drag.
• Learning curve which is actually being used by the larger investors and retailers will not suit with the average retailers and investors. Hence it is good enough for these average investors and retailers to avoid this learning curve while entering into the electronic platform.
• Going for an education and execution platform that costs around $99 to $250 a month is really not required and it is too costly in case of average investors and retailers. This may go good with the investors who have enough time and money to be spent. But as an average investor, this is something not affordable and not required.
• If you are really interested and too aggressive towards developing an electronic platform and making use of it, then it is better to choose some books to read on it first and then go with a fair amount to be invested on it rather than jumping in to the shark pool at initial stage itself.
• At last, if an average investor and retailer want to enjoy the benefits of an electronic platform then it is good for them to go with a platform that has already proven its levels and has given good records so far.

After all these ideas, still if you were in a dilemma to go with the electronic platform then it is advisable that you can choose an expert market analyst to guide you in trading through electronic platforms. Read More on Trading Online Academy

The Future of AT/HFT

The algorithmic trading and high frequency trading has really made a great revolution in the market industry. So many firms all around the world have turned themselves towards these automated and faster strategies. While there was a complete positive review going on at one side, there are also various negative ideas about the technology. The faster rate of the strategy makes many investors afraid about the consistency of the market. They feel that the risk factors in these strategies are high. The recent fall of American stock exchange was told that AT and HFT were the reason behind it. But on whole, the strategy is growing day by day and now it is essential to know the future of these strategies.

Future of Algorithmic Trading

It is quite well known that the ability of algorithms to manipulate the market data has already gone beyond the level of imagination. Since it is believed that the future of the market lies in the algorithmic trading strategy, it is essential to know what would be its updates and future developments. In a recent talk about the trading algorithms, it was told that the strategies would be producing informations like humans soon. Well at first it makes no sense that how a strategy could actually produce natural language information like human. But the advancement in technology has actually paved a way for this to become true.

It seems possible for the algorithms to tweet false information about a company and so the investors would get depressed, that would eventually result in the loss. The technology development has made it possible. But this type of negative ideas is only a pinch on what it is going to be in the near future. The advancements are really expected to be very high. So many institutes all around the world are providing courses on algo trading so that the youngsters who enter into market will face it easy with a professional approach.

Future of High Frequency Trading

The future of HFT was a discussion started four years back during the flash crash. The whole set up was ruined and the marketers were really afraid of making out things back to HFT again. Since the flash crash, the High Frequency Trading strategy was refined again and again and finally there is a strategy now with low risks but high benefits. Well the risk is everywhere and we have to be cautious. In case of HFT, it is quite clear about the future. The advancement in technology and the guts what the investors have got has made way for developing ultra speed strategies now.

The technology is going to be really tough, if you were not a computer geek. It is true that in future, only people who have a good computer skill can work with the strategies efficiently. It may not take too long for the ultra speed technology to come into existence. Hence it is good for people who were planning for a trading future to become a techno geek soon.

Impact of Foreign Investment and Policies on Chinese Stock Market

China market has attracted too many foreign investors in the last two months. Not just hundreds or thousands, but millions of trade accounts are opened by the foreign investors in the china market. the A shares are something that are traded in the Chinese stock markets like Shenzhen stock exchange and Shanghai stock exchange. The A shares are specially meant for the citizens of mainland. Only the people who belong to the mainland can purchase the A shares as it was quoted in the Chinese Renminbi. B shares are usually quoted in the foreign currencies such as USD and are open for the foreign investments. Both the A and the B shares are performing so well for the past one year.

Economic changes and regulatory moves in china

So many changes have been made in the economic activities of china and the regulations of the stock exchanges were also altered. The major changes that have created an impact in the Chinese market are:

• Promotion and supporting of equity market by the government by cutting down the rate of interest.
• The growth in the economy has eventually resulted in Chinese people investing in the stock markets.
• Banks from foreign countries such as Nomura Holdings and the JP Morgan Chase are about to get permission from the Chinese market to invest in the A shares.
• Billions of Chinese Yuan has been pumped up in the market by the china’s central bank.
• The lending margin has become more than thrice in the last one year which is about a record of 1.7 trillion Yuan or $274.6 billion.

International investors still believe that the country’s stock market will be growing further irrespective to the population and economic deceleration. This is because of the policies and regulations Chinese government has announced and it is believed that these new regulations will force down the banks and oil companies in china to go for IPO. These changes have really contributed a lot for the current changes happening in the Chinese Stock Exchange. The chances of getting the foreign eye off from the Chinese market are very less for the next few years. Read More on Stock Exchange Trading Courses

Factor Driving Foreign Investment to China

Some of the major factors that drive the foreign investments to china:

• Availability of capital: Capital is a very important factor behind any investment. The growth in the Chinese economy lets the foreign investors to find more capital in the market and thus they try to invest here in china.
• Infrastructure development and resource availability: China is really contributing a lot for the development of the country’s infrastructure and the country is provided with lot of resources for business here. This adds more attraction towards foreign investment.
• Regulatory environment: The Chinese government has loosened its regulations for investing in the country as they are tending to invite more foreign investments.
• Environmental stability: The political environment of the country and its economic status remains stable. This makes way for business to run stable in the country. Hence foreign investments are made for a stable business here.
• The local market and business climate: The Chinese market is one among the most active markets in the world which gives around a high turnover every year. Hence foreign investors are ready to invest in china to get more returns.

Equity Share Trading – Choice of Many Firms

The ultimate aim of any firm would be money making. A firm always looks out for ways to earn more money. Only firms with money liquidity are considered as the large icons in the world. The company that gives more turn over is called successful in the industry. Common fact of 21^st century, money making company leads the industry and others simply survive. Hence its must for a company to earn more if it really wants to be identified as a successful one. There are many ways a company can bring more financial liquidity in their system.