Faculty of Economics and Business Administration Publications Database

Algorithmic Trading in Practice


The use of computer algorithms in securities trading, or algorithmic trading, has become a central factor in modern financial markets. The desire for cost and time savings within the trading industry spurred buy side as well as sell side institutions to implement algorithmic services along the entire securities trading value chain. This chapter encompasses this algorithmic evolution, highlighting key cornerstones in it development discussing main trading strategies, and summarizing implications for overall securities markets quality. In addition, it touches on the contribution of algorithmic trading to the recent market turmoil, the U.S. Flash Crash, including the discussions of potential solutions for assuring market reliability and integrity.

Keywords: Algorithmic Trading; High-Frequency Trading; Trading Technologies; Smart Order Routing; Direct Market Access
Year: 2018
Link External Source: Online Version
Book Title: The Oxford Handbook of Computational Economics and Finance
ISBN: 9780199844371
Editor: Shu-Heng Chen, Mak Kaboudan and Ye-Rong Du
Publisher: Oxford University Press