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 inner most banker Jukka Vaananen has created an necessary and pleasant advisor to what relatively is going on inside of darkish swimming pools, what rewards you could attain as an investor and the way wider inventory markets and pricing might be suffering from darkish swimming pools. Written with the vintage For Dummies variety that has develop into a trademark of the emblem, Vaananen makes this complicated fabric effortless to appreciate with an insider's investigate the topic.

The publication 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 can be changing.

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

Because darkish swimming pools permit businesses to alternate shares anonymously and clear of the general public alternate, they don't seem to be topic to the peaks and troughs of the inventory marketplace, and feature just recently began to take off in a huge approach. Written with traders and finance scholars in brain, Dark swimming pools & excessive Frequency buying and selling For Dummies is the last word reference advisor for somebody seeking to comprehend darkish swimming pools and darkish liquidity, together with the several order kinds and key HFT strategies.

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They also have a downside: finding a match to your order can be difficult. The bigger the size (amount of shares) of your order, the harder it will be to find a single matching order. As a result, block-oriented dark pools can become a problem because they may not be able to find matching orders with enough volume. No minimum shares required: Streaming liquidity pools As dark pool providers have been looking to grow, streaming liquidity pools have become more popular. Streaming liquidity pools don’t have a minimum share requirement so they have opened the doors to high frequency traders in the hope that the high frequency traders bring liquidity to the pools.

Big-time investments: Blockoriented dark pools Block-oriented dark pools are the old school representatives of dark pools. They’re what dark pools were originally designed for – matching large blocks of shares among big investors with the minimum of market price impact. The amounts of shares involved aren’t small, like lot shares of a 100 or so; block-oriented dark pools often have a minimum block size in the tens of thousands of shares. Because of the minimum share requirements, these dark pools are relatively free of high frequency traders who prefer to trade in smaller 100- and 200-share lots.

It again became the biggest when the New York attorney general slapped Barclays LX with a lawsuit. The Swiss bank Credit Suisse now owns CrossFinder. Chapter 4: Introducing Dark Pool Providers Whereas Barclays LX chose to become more transparent, CrossFinder has decided to go the other way and become darker. In 2013 it decided to stop voluntarily publishing volume data from its dark pool. This could’ve just been a business decision, because Barclays LX dark pool was catching up and CrossFinder didn’t want to be seen as coming in second to its biggest competitor.

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