Sun, Aug 28, 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. Strategies - The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I, Hedge funds get more pushback on terms as enthusiasm for strategy wanes[more]

    The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I From IBTImes.co.uk: To illustrate a strategic gap common to today's portfolio managers, George Sokoloff, PhD, founder and CIO at Carmot Capital, proposes an interesting thought experiment – a breakdown of

  2. Institutional investors - Investors set to increase allocation to private debt, With investment income key, Richmond retirement system faces funding challenges[more]

    Investors set to increase allocation to private debt Investors are set to increase their allocation to private debt, with 60% revealing they believe the private debt market will grow over the next 12 months, according to a new study by Elian, a leading funds services provider. 41%

  3. Investing - Hedge funds snap up banks, unload Apple, Some of hedge funds' favorite stocks are finally starting to beat the market, Einhorn's Greenlight shifts positions, Treasury yield climbs to two-month high as Fischer joins hawks, 9 stocks smart investors put their money in last quarter[more]

    Hedge funds snap up banks, unload Apple From Barrons.com: Prominent hedge funds have a newfound love of big banks, and some have a distaste for shares of Apple, regulatory filings released last week show. The filings suggest that the funds have been pivoting their portfolios in recent mon

  4. Chesapeake energy seeks $1 billion loan to refinance debt[more]

    From Bloomberg.com: Chesapeake Energy Corp. is seeking a $1 billion loan as the company battered by cratering fuel prices and credit downgrades takes a step to address its $9 billion debt load. The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group

  5. Institutions - Nordic pension funds magnify focus on unlisted and direct investing, building up teams[more]

    From IPE.com: As bond yields remain at low or negative levels, pension funds and other institutional investors in the Nordic region are stepping up efforts to find higher returns by adding more unlisted investments to portfolios and are expanding in-house teams in order to do this, according to new