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35 execution of portfolio decisions (the context of trading: market…
35 execution of portfolio decisions
the context of trading:
market microstructure
order types
types of markets
quote-driven (dealer) markets
order-driven markets
brokered markets
hybrid markets
the roles of brokers and dealers
evaluating market quality
the cost of trading
transaction cost components
pretrade analysis: econometric models for costs
types of traders and their preferred order types
types of traders
traders' selection of order types
info-motivated traders
value-motivated traders
liquidity-motivated traders
passive traders
trade execution decisions and tactics
decisions related to the handing of a trade
objectives in trading and trading tactics
liquidity at any cost
costs are not important
need trustworthy agent
advertise to draw liquidity
low cost whatever the liquidity
trading tech summary
automated trading
the algorithmic revolution
classification of algorithmic execution systems
simple logical participation strategies
implementation shortfall strategies
opportunistic participation strategies
specialized strategies
the reasoning behind
logical participation algorithmic strategies
serving the client's interests
CFA institute trade management guidelines
the importance of an ethical focus
concluding remarks