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Market microstructure and strategy, Bots and Algorithms, Program Trading,…
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Bots and Algorithms
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High frequency traders (HFT) utilize bots, computerized systems, to access and interpret stock market information.
The ability of each HFT firm to exploit stock pricing patterns depends on the algorithms created by its employees.
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Algorithms in HFT trading may contain randomizers, causing competition to resemble card games, raising concerns about ignoring underlying company valuations.
Program Trading
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The NYSE defines a coordinated trading strategy as the purchase or sale of 15 or more stocks with a market value of $1 million or more.
Orders are placed directly on the market and executed according to a predetermined set of instructions.
Simultaneously placing orders can reduce risk and maximize profits by exploiting market inefficiencies, but placing a large number of securities may not be effective.
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