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The High Frequency Game Changer: How Automated Trading Strategies Have Revolutionized the Markets

Book Description

The financial industry's leading independent research firm's forward-looking assessment into high frequency trading

Once regarded as a United States-focused trend, today, high frequency trading is gaining momentum around the world. Yet, while high frequency trading continues to be one of the hottest trends in the markets, due to the highly proprietary nature of the computer transactions, financial firms and institutions have made very little available in terms of information or "how-to" techniques. That's all changed with The High Frequency Game Changer: How Automated Trading Strategies Have Revolutionized the Markets. In the book, Zubulake and Lee present an overview of how high frequency trading is changing the face of the market. The book

  • Explains how we got here and what it means to traders and investors

  • Details how to build a high frequency trading firm, including the relevant tools, strategies, and trading talent

  • Defines key components common to HFT such as algorithms, low latency trading infrastructure, collocation etc.

The High Frequency Game Changer takes a highly controversial and extremely complicated subject and makes it accessible to anyone with an interest or stake in financial markets.

Table of Contents

  1. Cover
  2. Series
  3. Title Page
  4. Copyright
  5. Dedication
  6. Introduction
  7. Acknowledgments
  8. Chapter 1: Birth of High Frequency Trading
    1. DEFINING HIGH FREQUENCY TRADING
    2. WHO ARE THE HIGH FREQUENCY TRADERS?
    3. IMPACT OF HIGH FREQUENCY TRADING
    4. BUILDING A HIGH FREQUENCY TRADING TEAM
  9. Chapter 2: Market Structure
    1. ORDER HANDLING RULES OF 1997
    2. GROWTH OF ELECTRONIC COMMUNICATION NETWORKS
    3. REGULATION NATIONAL MARKET SYSTEM
    4. MARKET FRAGMENTATION VERSUS COMPETITION
    5. DARK POOLS
  10. Chapter 3: Trading Infrastructure
    1. RISE OF HIGH PERFORMANCE TECHNOLOGY VENDORS
    2. KEY COMPONENTS OF HIGH PERFORMANCE INFRASTRUCTURE
    3. FEED HANDLERS
    4. TICKER PLANT
    5. MESSAGING MIDDLEWARE
    6. STORAGE
    7. NETWORKING
    8. COLOCATION
    9. SPONSORED ACCESS
  11. Chapter 4: Liquidity
    1. HFT AS LIQUIDITY PROVIDERS
    2. FLASH CRASH
  12. Chapter 5: Trading Strategies
    1. EXAMPLES OF ALGORITHMS
    2. ORDER TYPES
    3. FLASH ORDERS
    4. HIGH FREQUENCY TRADING AND PREDATORY STRATEGIES
  13. Chapter 6: Expansion in High Frequency Trading
    1. FUTURES
    2. FIXED INCOME
    3. FOREIGN EXCHANGE MARKET
    4. EQUITY OPTIONS
    5. OVER THE COUNTER DERIVATIVES
    6. EXPANSION INTO GLOBAL MARKETS
  14. Chapter 7: Positives and Possibilities
    1. COMMODITIZING HIGH FREQUENCY TRADING
    2. TRADING TECHNOLOGY DEMANDS AND PREFERENCES
    3. INTERNAL FOCUS
    4. CHOOSING VENDORS
    5. FINDING THE NEXT OPPORTUNITY
    6. ISSUES AND RISKS
    7. ORDER ROUTING GETS SMART
    8. SMART ORDER ROUTING'S FUTURE
    9. IS ARTIFICIAL INTELLIGENCE NEXT?
    10. ECONOMIC INDICATORS
    11. NEWS
    12. SECURITIES AND EXCHANGE COMMISSION FILINGS
    13. THE PSEUDO-SEMANTIC WEB
    14. GOING GLOBAL
    15. THE NEXT WAVE
  15. Chapter 8: Credit Crisis of 2008
    1. U.S. FEDERAL RESERVE
    2. REGULATORY AGENCIES
    3. CREDIT AGENCIES
    4. POLITICIANS
    5. END-USERS OF DERIVATIVE PRODUCTS
    6. RECENT REGULATORY HISTORY
    7. FINANCIAL MODERNIZATION ACT OF 1999
    8. COMMODITY FUTURES MODERNIZATION ACT OF 2000
    9. DODD FRANK WALL STREET REFORM ACT OF 2010
    10. ENDING TOO BIG TO FAIL BAILOUTS
    11. CREATING TRANSPARENCY AND ACCOUNTABILITY FOR DERIVATIVES
    12. HEDGE FUNDS
    13. CREDIT RATING AGENCIES
    14. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE
    15. IMPACT OF POTENTIAL REGULATIONS AND RULE CHANGES—SECURITIES AND EXCHANGE COMMISSION CONCEPT RELEASE
  16. Chapter 9: Conclusion
  17. Glossary
  18. About the Authors
    1. PAUL ZUBULAKE
    2. SANG LEE
  19. Index