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Dark Pools and High Frequency Trading For Dummies



Dark Pools and High Frequency Trading For Dummies

Jay Vaananen

ISBN: 978-1-118-87930-6 December 2014 240 Pages


A plain English guide to high frequency trading and off-exchange trading practices

In Dark Pools & High Frequency Trading For Dummies, senior private banker Jukka Vaananen has created an indispensable and friendly guide to what really goes on inside dark pools, what rewards you can reap as an investor and how wider stock markets and pricing may be affected by dark pools. Written with the classic For Dummies style that has become a hallmark of the brand, Vaananen makes this complex material easy to understand with an insider's look into the topic.

The book takes a detailed look at the pros and the cons of trading in dark pools, and how this type of trading differs from more traditional routes. It also examines how dark pools are currently regulated, and how the regulatory landscape may be changing.

  • Learn what types of dark pools exist, and how a typical transaction works
  • Discover the rules and regulations for dark pools, and some of the downsides to trading
  • Explore how dark pools can benefit investors and banks, and who can trade in them
  • Recognize the ins and outs of automated and high frequency trading

Because dark pools allow companies to trade stocks anonymously and away from the public exchange, they are not subject to the peaks and troughs of the stock market, and have only recently begun to take off in a big way. Written with investors and finance students in mind, Dark Pools & High Frequency Trading For Dummies is the ultimate reference guide for anyone looking to understand dark pools and dark liquidity, including the different order types and key HFT strategies.

Introduction 1

Part I: Getting Started with Dark Pools 5

Chapter 1: Focusing on Dark Pools and High Frequency Trading, Just the Basics 7

Chapter 2: Taking a Dip into Dark Pools 15

Chapter 3: Grappling with the Ins and Outs of Securities Markets 25

Part II: Diving into Dark Pool Markets 37

Chapter 4: Introducing Dark Pool Providers 39

Chapter 5: Meeting the Players and Places 53

Chapter 6: Regulating Dark Pools 65

Part III: Coming to Grips with Automated Trading 77

Chapter 7: Comprehending Automated Trading 79

Chapter 8: Grasping Standard Order Types 93

Chapter 9: Identifying the Special Order Types 105

Chapter 10: Delving into High Frequency Trading 119

Chapter 11: Understanding Key High Frequency Trading Strategies 133

Part IV: Being Aware of the Risks of Dark Pools 147

Chapter 12: Jockeying Too Much for Position 149

Chapter 13: The Ins and Outs of Flash Crashes 163

Part V: The Part of Tens 181

Chapter 14: Ten of the Best Dark Pool/HFT Websites 183

Chapter 15: Ten Ways to Swim Safely in Dark Pools 191

Chapter 16: Ten Common Algorithmic Strategies 199

Chapter 17: Ten Things to Know About Market Microstructure 207

Index 215