Algorithmic Trading

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Algorithmic trading, also called automated trading, black-box trading, or algo trading, is the use of electronic platforms for entering trading orders with an algorithm which executes pre-programmed trading instructions accounting for a variety of variables such as timing, price, and volume.

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Algorithmic Trading

  1. 1. Algorithmic Trading lersmethasakul@live.com
  2. 2. Quantitative Finance
  3. 3. The varieties of different kinds of quant. Quants come in three basic varieties. 1. Structurers: people who price complex financial instruments. There are going to be quant jobs which don’t fit exactly into these categories, there is a lot of overlap between traders and risk managers
  4. 4. The varieties of different kinds of quant. Quants come in three basic varieties. 2. Risk managers: people who manage portfolio risk. There are going to be quant jobs which don’t fit exactly into these categories, there is a lot of overlap between traders and risk managers
  5. 5. The varieties of different kinds of quant. Quants come in three basic varieties. 3. Quant traders: people who use statistics to make money by buying and selling. There are going to be quant jobs which don’t fit exactly into these categories, there is a lot of overlap between traders and risk managers
  6. 6. Successful quant traders don’t like to talk about what they do. Structurers and risk managers have to talk about what they do.
  7. 7. To make money as a trader, assuming your motivation is to make a profit, you need to buy low and sell high.
  8. 8. 1. Liquidity peddlers Market makers earn the spread. Trading Strategies / Type of trader
  9. 9. 2. Arbitrageurs Earn a different kind of spread. Trading Strategies / Type of trader
  10. 10. 3. Statistical arbitrageurs Hybrid of liquidity peddlers and arbitrageurs. Trading Strategies / Type of trader
  11. 11. 4. Fundamentals traders The electrical version of Warren Buffet. Trading Strategies / Type of trader
  12. 12. 5. Hedgers Trading as a form of insurance. Trading Strategies / Type of trader
  13. 13. 6. Noise traders Trading Strategies / Type of trader
  14. 14. High-Frequency Trading (HFT) Speed is important in all kinds of trades.
  15. 15. ALGO TRADING DEVELOPMENT FRAMEWORK (HTTP://WWW.QUANTHOUSE.COM/ALGO-TRADING)
  16. 16. Algorithmic Trading System Architecture (http://www.stuartreid.co.za/algorithmic-trading-system-architecture-post)
  17. 17. OpenQuant is an Automated Trading System (ATS) Development Platform designed around the well known SmartQuant Financial Data Analysis and Trading Framework. (http://www.smartquant.com/openquant.html)

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