Electronic and Algorithmic Trading Technology: The Complete Guide

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Academic Press, Jul 27, 2010 - Business & Economics - 224 pages
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Electronic and algorithmic trading has become part of a mainstream response to buy-side traders’ need to move large blocks of shares with minimum market impact in today’s complex institutional trading environment. This book illustrates an overview of key providers in the marketplace. With electronic trading platforms becoming increasingly sophisticated, more cost effective measures handling larger order flow is becoming a reality. The higher reliance on electronic trading has had profound implications for vendors and users of information and trading products. Broker dealers providing solutions through their products are facing changes in their business models such as: relationships with sellside customers, relationships with buyside customers, the importance of broker neutrality, the role of direct market access, and the relationship with prime brokers.

Electronic and Algorithmic Trading Technology: The Complete Guide is the ultimate guide to managers, institutional investors, broker dealers, and software vendors to better understand innovative technologies that can cut transaction costs, eliminate human error, boost trading efficiency and supplement productivity. As economic and regulatory pressures are driving financial institutions to seek efficiency gains by improving the quality of software systems, firms are devoting increasing amounts of financial and human capital to maintaining their competitive edge. This book is written to aid the management and development of IT systems for financial institutions. Although the book focuses on the securities industry, its solution framework can be applied to satisfy complex automation requirements within very different sectors of financial services – from payments and cash management, to insurance and securities. Electronic and Algorithmic Trading: The Complete Guide is geared toward all levels of technology, investment management and the financial service professionals responsible for developing and implementing cutting-edge technology. It outlines a complete framework for successfully building a software system that provides the functionalities required by the business model. It is revolutionary as the first guide to cover everything from the technologies to how to evaluate tools to best practices for IT management.

  • First book to address the hot topic of how systems can be designed to maximize the benefits of program and algorithmic trading
  • Outlines a complete framework for developing a software system that meets the needs of the firm's business model
  • Provides a robust system for making the build vs. buy decision based on business requirements
 

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Contents

Overview of Electronic and Algorithmic Trading
1
Automating Trade and Order Flow
15
The Growth of Program and Algorithmic Trading
29
Alternative Execution Venues
39
Algorithmic Strategies
51
Algorithmic Feasibility and Limitations
63
Electronic Trading Networks
71
Effective Data Management
83
Electronic and Algorithmic Trading for Different Asset Classes
111
Regulation NMS and Other Regulatory Reporting
125
Build vs Buy
141
Trading Technology and Prime Brokerage
153
Profiling the Leading Vendors
163
The Implementation of Trading Systems
181
Glossary of Terms
187
Index
199

Minimizing Execution Costs
91
Transaction Cost Research
103

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Page xiii - Homer was bom Oct. 19, 1936, in Davenport, Iowa, and graduated from Urbandale High School, Des Moines, Iowa, in 1954. He earned a bachelor of arts degree from the University of Iowa in 1958 and a master's degree in business administration from the College of William and Mary in 1972. The general completed Squadron Officer School in 1967, Armed Forces Staff College in 1 972, Industrial College of the Armed Forces in 1 974 and the National War College in 1976. Upon graduation from the University of...

About the author (2010)

Kendall Kim consults as a Business Analyst and lives in Greenwich, CT.

He specializes in delivering technology solutions to Wall Street securities firms. In this role he has been responsible for the specification and implementation of large trading, risk management, and real-time market data systems. He has consulted and worked for firms such as UBS Investment Bank, Deutsche Bank, and Goldman Sachs.

Kendall holds a bachelor's degree in Economics from Boston University, Boston, MA and a master's degree in Business Administration from The College of William and Mary, Williamsburg, VA.

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