Mon, Feb 15, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Eurex Exchange outlines the challenges and opportunities of high-frequency trading

Tuesday, May 07, 2013

Beverly Chandler, Opalesque London: A recent presentation from Eurex Exchange entitled High-frequency trading – a discussion of relevant issues, the exchange explained the difference between algorithmic trading (AT) and high frequency trading (HFT).

Common factors between the two include pre-designed trading decisions, that both are used by professional traders who are observing market data in real-time and they use automated order submission and automated order management. Other common factors are that there is no human intervention and they access the market directly.

However, peculiar to AT is the fact that it is primarily agent trading, minimizing market impacts (for large orders) and these traders hold significant positions overnight and typically even for days, weeks or months, working an order through time and across markets.

By contrast, Eurex assesses the characteristics of HFT as

  • Proprietary trading
  • High number of orders, rapid order cancellation
  • Mainly spread and arbitrage income
  • No significant position at the end of a day (flat position)
  • Short holding periods, small margin per trade
  • Low latency requirement
  • Focus on highly liquid instruments
Eurex explains that it is difficult to make a conclusive definition of HFT, as it can be applied to a broad spectrum of strategie......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Real estate secondaries sole 'bright spot' in 2015, As hedge funds stumble, one firm prepares to buy illiquid stakes[more]

    Real estate secondaries sole 'bright spot' in 2015 From IPE.com: The secondary market for property was the sole “bright spot” over the course of 2015, as hedge fund secondaries saw deals fall by two-thirds, according to a wide-ranging survey of the market. Setter Capital said 2015 saw th

  2. Asia - Hedge fund manager Kyle Bass estimates China's foreign reserves below critical level[more]

    From Nasdaq.com: Investor Kyle Bass stepped up his attack on China's currency, arguing in an investor letter distributed Wednesday that the second-largest economy's foreign reserves are "already below a critical level." The comments mark the latest effort by hedge funds and other investors to raise

  3. Investing - Some hedge funds want to make subprime auto loans next big short, 11 hedge funds that are “all in” on the FANG stocks, Hedge funds short London luxury homes, Cynet raises $7 million from U.S. hedge fund[more]

    Some hedge funds want to make subprime auto loans next big short From Bloomberg.com: A group of hedge funds, convinced they have found the next Big Short, are looking to bet against bonds backed by subprime auto loans. Good luck finding a bank willing to do the trade. Money manage

  4. Investing - Hedge funds see selloff in European bank stocks as buying opportunity[more]

    From WSJ.com: The massive selloff in European bank stocks and bonds is overdone and presents a “phenomenal” buying opportunity, according to some of Europe’s top hedge-fund managers. Despite a 28% slump in European bank stocks this year, including a 38% fall in Deutsche Bank AG and a 34% drop in Soc

  5. Legal - Carlyle accused of fraud by ex-employee, Hedge funds win CDS breach of contract suit against Deutsche Bank, Hedge fund asks for OK on $27.5m Goldman CDO deal, SFO examines Barclays hedge fund profits[more]

    Carlyle accused of fraud by ex-employee From AI-CIO.com: A former portfolio manager claims he was fired for blowing the whistle on “crazy” and “irresponsible” investments. Carlyle Group has been sued by a former portfolio manager for one of its hedge funds, who accused the firm of “knowi