Social Benefits of HFT and Algo Trading: Regulators should Embrace them

Posted on 1 CommentPosted in Finance, Trading

The tremendous growth in financial trading volumes in the last couple of decades has been made possible only with the use of technology. Technology has helped in – automating the dissemination of market data and other relevant information by exchanges and trading participants – capturing and consolidation of market data from various exchanges and other sources of relevant information – making complex calculations on live and historic data, leading to trade decisions – trading and managing risk – lowering the latency and cost of trading – various post-trade processes Technology is heavily and generally efficiently used by brokers (providing various retail and institutional investors access to financial markets), high frequency traders (who trade in huge volumes aggregating small profits in […]

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Algo Trading: The 1-O-1

Posted on Leave a commentPosted in Trading

Electronic trading in the last decade has laid the foundation for increased use of technology in the financial markets. If a trader’s mind can be coded into an algorithm (step by step procedure used for calculations and decision making), we can automate a lot of what the trader does. And using an algorithm , the trading can be more disciplined, faster and can process lots of complex data. Algorithmic trading means an algorithm decides when to buy or sell a financial security at which price, and how will the order be executed and risk managed. This helps replace mundane tasks a trader was doing, and even leading to some complex data processing that an algorithm (with the use of computing […]

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