Algorithmic Trading

Global equity markets have changed fundamentally over the last decades Regulatory reforms to promote competition for trading services have led to considerable fragmentation of markets. New entrants and new technology have contributed to innovative new trading mechanisms and pricing structures. Today, markets are overwhelming electronic, with trading occurring using algorithms rather than manually. Graduates wishing to pursue careers in financial markets need to understand the new market structure that exists and have skills to understand and implement trading strategies in this environment. This subject will ensure students develop these skills and knowledge, through a combination of lectures and hands-on experience of manual and robot trading in online experimental markets. The class is quite unique. Despite growing importance of computerised trading in financial markets, there exist hardly any finance classes that expose students to the issues, let alone allowing them to develop the skills to conceive robot traders themselves through participation in experimental online markets.

• 1Explain the key features of the microstructure of financial markets
• 2Successfully trade in a number of different trading systems
• 3Conceive of, and if with computer skills, program, algorithms for the automatic execution of trading strategies
• 4Differentiate between types of trading strategies
• 5Back-test algorithmic traders or test them in an experimental setting
• 6Opine in an informed way about the advantages and drawbacks of algorithmic trading