New Cinnober white paper: Algorithmic trading and its implications for marketplaces
Algorithmic trading and the related term high frequency trading are generally defined as using computers to generate orders that are entered on marketplaces. Lately the term, rightly or wrongly, has been widely associated with its negative impact on marketplaces from a technical as well as a business and fairness perspective. Others argue that the positive effects of algorithmic trading – such as increased liquidity and the elimination of market inefficiencies – outweigh its potential negative effects.
Regardless of this, it is a fact that algorithmic trading has become increasingly popular in various forms on most of the major marketplaces around the world, demanding well thought-out strategies for how to accommodate this trend.
In the white paper Algorithmic trading and its implications for marketplaces Cinnober takes on the subject from a marketplace perspective. The paper:
- Categorizes different types of algorithmic trading
- Describes their implications for marketplaces
- Describes how to accommodate algorithmic trading in marketplaces while minimizing potential adverse effects
- Describes the use of special-purpose orders in the context of algorithmic trading
White paper: Algorithmic trading and its implications for marketplaces