Blog Posts

Synthetic assets are financial instruments that mimic the value of other assets without needing to own the underlying asset. They’re essentially derivatives, meaning their value is derived from something else – a commodity like gold, a stock, index, or other asset.   Key Takeaways – Synthetic Asset Creation Versatility in Exposure Synthetic assets provide exposure […]

The Efficient Market Hypothesis (EMH) is a cornerstone of modern finance, but it’s often misunderstood. It doesn’t claim that markets are perfect or always rational. Instead, it posits that market prices reflect all available information. This means stock prices aren’t predictable – they adjust instantly to new news or data. Each piece of information – […]

The Random Walk Hypothesis (RWH) says that asset prices change randomly. In other words, it posits that each new price is independent of the last. Think of it like flipping a coin: Even if you get heads 5 times in a row, the next flip is still a 50/50 chance. According to the RWH, the […]

A liquidity aggregator combs through multiple exchanges and trading platforms, searching for the best deals on your behalf. In markets, prices can vary across different venues. This is where a liquidity aggregator comes in. It not only helps you find the most favorable prices, but it also helps you execute your trades seamlessly. A liquidity […]

Crossing networks are alternative trading systems (ATS) that offer an alternative trading venue to traditional exchanges. They offer a platform where buyers and sellers can directly exchange assets, cutting out the middleman. The primary function of a crossing network is to match buy and sell orders without routing them through a public exchange. This means […]

Straight-Through Processing (STP) is a streamlined method of completing transactions that’s common in securities trading. It eliminates manual intervention by automating every step, from initiation to final settlement. In essence, it’s like a digital assembly line for data – for faster, more efficient, and less error-prone operations. For day traders, STP enables rapid trade execution […]

Electronic Communication Networks (ECNs) are digital trading venues that directly connect buyers and sellers. They eliminate traditional intermediaries and help improve market transparency and efficiency. They provide real-time data on prices and orders, facilitating fast, cost-effective trading, and are adaptable to various asset classes including cryptocurrencies. Originating in the 1990s, ECNs have transformed financial markets […]

Multilateral Trading Facilities (MTFs) are flexible trading venues that match buyers and sellers of financial instruments outside of traditional exchanges. They’re like the European equivalent of Alternative Trading Systems (ATS). They operate under European Union directives and are characterized by less stringent regulations, which allows them to innovate and tailor services to specific market needs. […]

Alternative Trading Systems (ATS) are reshaping modern financial trading by offering competitive advantages over traditional exchanges. They offer value-add to markets through lower fees, technological innovation, and specialized services tailored to specific trading strategies. At the same time, ATSs also introduce challenges such as market fragmentation and regulatory complexities.   Key Takeaways – Alternative Trading […]

Trading venues are specialized platforms where financial instruments such as stocks, bonds, commodities, and derivatives are bought and sold. These venues vary in structure, regulation, and the type of assets traded, catering to different traders/market participants and trading strategies. Key types include stock exchanges, commodity exchanges, electronic communication networks (ECN), and alternative trading systems (ATS). […]