Dark Pools and High Frequency Trading For Dummies by Jay Vaananen

By Jay Vaananen

A undeniable English consultant to excessive frequency buying and selling and off-exchange buying and selling practices

In Dark swimming pools & excessive Frequency buying and selling For Dummies, senior deepest banker Jukka Vaananen has created an crucial and pleasant advisor to what rather is going on inside of darkish swimming pools, what rewards you could achieve as an investor and the way wider inventory markets and pricing should be plagued by darkish swimming pools. Written with the vintage For Dummies sort that has develop into a trademark of the emblem, Vaananen makes this advanced fabric effortless to appreciate with an insider's check out the topic.

The ebook takes a close examine the professionals and the cons of buying and selling in darkish swimming pools, and the way this sort of buying and selling differs from extra conventional routes. It additionally examines how darkish swimming pools are at the moment regulated, and the way the regulatory panorama should be changing.

  • Learn what sorts of darkish swimming pools exist, and the way a customary transaction works
  • Discover the principles and rules for darkish swimming pools, and a few of the downsides to trading
  • Explore how darkish swimming pools can gain traders and banks, and who can exchange in them
  • Recognize the fine details of computerized and excessive frequency trading

Because darkish swimming pools enable businesses to exchange shares anonymously and clear of the general public trade, they don't seem to be topic to the peaks and troughs of the inventory marketplace, and feature only in the near past began to take off in an important manner. Written with traders and finance scholars in brain, Dark swimming pools & excessive Frequency buying and selling For Dummies is the final word reference consultant for somebody seeking to comprehend darkish swimming pools and darkish liquidity, together with different order kinds and key HFT strategies.

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Extra resources for Dark Pools and High Frequency Trading For Dummies

Sample text

Market liquidity is important because the more liquidity there is, the less effect a single order or a handful of orders has on the price of a stock. When there is plenty of liquidity, the value of the stock won’t be overly affected by a single order. 01, indicates good liquidity. ✓ Market depth: Volume, in other words, the amount of shares on offer on both sides of the trading book, determines market depth. If plenty of shares (counted in the thousands or even tens of thousands) are on offer on both sides then that’s an indication of good liquidity.

In the United States, a broker is obligated to supply this information to her clients. This information will show you if your broker has a preference for certain markets. If so, be sure to ask why. com/cheatsheet/darkpools for more questions to ask your broker. Sleuthing on your own if you don’t use a broker After you know what dark pools your broker uses, look them up. Chapter 4 includes some of the main providers. Investigate the providers online and look for any specific knowledge of how they match trades.

But dark pools do have some risks (which I discuss in the previous section), so you want to know if and when your trades are being executed in a dark pool and whether doing so is to your advantage or your broker’s advantage. These sections explain what to do to ensure that you get the best from your trades. Asking your broker the right questions In order to find out whether your trades are being executed in dark pools, the best thing to do is to discuss the matter with your broker. Remember that dark pools can be good for you because they give you the opportunity to get your trades matched inside the spread of the displayed market and therefore 21 22 Part I: Getting Started with Dark Pools get a better price.

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