EDUCATION

Posted By Steve On Thursday, September 1st, 2016 With 0 Comments

Introduction to Market Structure and Electronic Trading

Course Description
This is an intensive 2 day course covering the key topics of electronic trading and its market structure where you will gain extensive knowledge and understanding of the principles and mechanics of the industry. Subjects include the role and business of the stock exchange, buy side vs sell side algorithms, high frequency trading, sell side trading desks, types of buy side, regulations that shape the industry and the technology that supports it. This course is ideal for those who want to further their knowledge and understanding of electronic trading providing a solid foundation for career-minded professionals.

Learning Outcome
This course will teach you how the electronic trading industry operates and functions, what to expect in a typical trading day, who the particpants are within the industry and how each functions together. You will also learn about the trading tools the industry uses, the exchange’s matching engine logic and the real cost of trading.

Duration
2 days in-class

Contact
Email us HERE for more information.

Course Outline
Industry overview – A top down look at the key components of the electronic trading industry
• Exchange
• Sell Side
• Buy Side
• Regulations
• Technology

Exchange
Purpose – IPO, secondary market, price discovery

Introduction to the Order Book
• Order matching logic – Price / Time priority
• Order types – Limit, Market, At Close, Fill or Kill`

Trading day explained
• Order acceptance phase
• Pre-opening phase
• Continuous auction phase
• Closing auction phase
• T+1 session

Revenue streams
• Trading fees, pricing models, maker taker
• Access Fees
• Market data fees
• Membership/participant fees
• hosting fees
• clearing fees

Participants
• Clearing members
• Trading members
• Market makers
• Remote members

Product overview
• Stocks / shares
• ETFs
• Derivatives – Cash vs physical delivery
• Debt
• Foreign Exchange
• OTC

Competition – Alternative Trading Venues, MTF, ATS, ECN

Clearing House
• Purpose
• Functions

Surveillance
• Purpose and function

Sell side
Types of sell side
• Clearing Brokers
• Non-clearing broker
• Agency vs Broker-Dealer

Execution types
• Sales Traders
• Block Trading
• Program Trading
• Sell Side Algorithms
• DMA

Sell side algorithms
• VWAP
• Pegging
• Implementation Shortfall
• Participation (Percentage of Volume)
• TWAP
• Market On Close
• Iceberg

Smart Order Routing
• Purpose and function

Cost of Trading
• Explicit – commission, trading fees, stamp duty
• Implicit – Slippage, Opportunity cost

Trading Analytics – Measuring the cost and quality of trading. How good are our sell side algorithms?

Dark Pools
• Purpose and role
• How it works
• Toxic orders

Settlement
• Settlement cycle overview

Buy Side
Types of buy side
• Day trading
• Pension funds or long only
• Hedge funds
• Market makers
• Passive vs Active

Buy side algorithms
• Arbitrage
• Speculation
• Pairs trading
• Mean reversion
• Basket trading
• Trend following
• Other

High Frequency Trading (HFT)
• What does it mean? How is it defined?
• What is needed to trade HFT?
• How fast are orders sent?
• Order to fill ratio
• Quote stuffing

Indices
• Benchmarking
• Rebalancing

Research
• Independent vs Sell side

Technology
• FIX Protocol, SWIFT
• Market Data, static data, data storage
• Hosting – Co-location, Proximity
• EMS vs OMS
• Connectivity – DMA, Sponsored Access

US vs Europe vs Asia market structure
• Relative market sizes
• Clearing, DTCC
• Cost of trading
• Profile of trader types

Regulation
• Historical overview
• MIFID 2
• MIFIR
• Dodd Frank

Future of Electronic Trading
• Block Chain
• Financial Trading Tax
• Exchange mergers
• Unbundling
• Consolidated tape
• Outsourcing Trading

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