1 / 6

Tristan de Gouvion Saint Cyr Views on HFT

Tristan de Gouvion Saint Cyr finance expert. Tristan de Gouvion Saint Cyr Investment Expert. Tristan de Gouvion Saint Cyr talks about how HNW investors can be benefited from structured products.Tristan de Gouvion Saint Cyr talks about an investment trend in today's markets: HFT. The post-2008 market condition saw a drastic increase in volatility which lead to challenge market players, and find new solutions to benefit from this new environment. Tristan de Gouvion Saint Cyr quotes Wikipedia: "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 whose variables may include timing, price, or quantity of the order, or in many cases initiating the order without human intervention.

TristandeGouvionStCr
Download Presentation

Tristan de Gouvion Saint Cyr Views on HFT

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Tristan de Gouvion Saint Cyr Algorithmic and HFT (High Frequency Trading)

  2. HFT • Tristan de Gouvion Saint Cyr talks about an investment trend in today's markets: HFT. • The post-2008 market condition saw a drastic increase in volatility which lead to challenge market players, and find new solutions to benefit from this new environment

  3. Tristan de Gouvion Saint Cyr on HFT • Tristan de Gouvion Saint Cyr quotes Wikipedia: "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 whose variables may include timing, price, or quantity of the order, or in many cases initiating the order without human intervention.

  4. Tristan de Gouvion Saint Cyr on HFT • Algorithmic trading is widely used by investment banks, pension funds, mutual funds, and other buy-side (investor-driven) institutional traders, to divide large trades into several smaller trades to manage market impact and risk. Sell side traders, such as market makers and some hedge funds, provide liquidity to the market, generating and executing orders automatically. • A special class of algorithmic trading is "high-frequency trading" (HFT). Many types of algorithmic or automated trading activities can be described as HFT.

  5. Tristan de Gouvion Saint Cyr on HFT • As a result, in February 2012, the Commodity Futures Trading Commission (CFTC) formed a special working group that included academics and industry experts to advise the CFTC on how best to define HFT. HFT strategies utilize computers that make elaborate decisions to initiate orders based on information that is received electronically, before human traders are capable of processing the information they observe. Algorithmic trading and HFT have resulted in a dramatic change of the market microstructure, particularly in the way liquidity is provided. Algorithmic trading may be used in any investment strategy, including market making, inter-market spreading, arbitrage, or pure speculation (including trend following).

  6. Tristan de Gouvion Saint Cyr on HFT • The investment decision and implementation may be augmented at any stage with algorithmic support or may operate completely automatically. • A third of all European Union and United States stock trades in 2006 were driven by automatic programs, or algorithms, according to Boston-based financial services industry research and consulting firm Aite Group. As of 2009, studies suggested HFT firms accounted for 60-73% of all US equity trading volume, with that number falling to approximately 50% in 2012. • One of the main issues regarding HFT is the difficulty in determining how profitable it is. A report released in August 2009 by the TABB Group, a financial services industry research firm, estimated that the 300 securities firms and hedge funds that specialize in this type of trading took in roughly US$21 billion in profits in 2008.

More Related