Blog Posts

Direct Market Access (DMA) allows traders and investors to place buy and sell orders directly on the stock exchange’s order book. This method bypasses traditional brokers and offers faster execution speeds and greater transparency in trading.   Key Takeaways – Direct Market Access (DMA) DMA allows traders and investors to place orders directly on the […]

Order execution strategies in finance, markets, and trading are used for minimizing costs, improving execution quality, and managing risk. These strategies are important for both individual traders and institutional investors. They involve various techniques and algorithms to execute trades efficiently by considering market conditions, volume, and price impact.   Key Takeaways – Order Execution Strategies […]

Mean-Variance Optimization, also known as the Two-Moment Decision Model, is a popular financial metric developed by Harry Markowitz in 1952. It forms the basis for modern portfolio theory and assists in the construction of investment portfolios. This analysis hinges on two key statistical measures: the mean, representing expected returns, and the variance, indicating risk or […]

Adaptive filtering techniques in finance enable the creation and adjustment of predictive models in real-time. Fundamentally, in trading contexts, how do changes in the value of input variables lead to certain trading decision(s))? Adaptive filtering techniques help with these fundamental analysis tasks, which makes them valuable for various financial applications including algorithmic trading, risk management, […]

The role of money supply in the economy is a hotly debated topic among economists, with its relationship to inflation being particularly controversial. The traditional perspective suggests that an increase in money supply leads to inflation, while a transactions-based approach argues that it is the level of spending that primarily influences inflation. The complexity of […]

Stochastic Discount Factor (SDF) models are central to financial economics, as they provide a unified framework for understanding asset pricing. These models, also known as pricing kernel models, are based on the concept that the price of an asset is the present value of its future payoffs, discounted by a stochastic process.   Key Takeaways […]

The 2010 Flash Crash was a significant market crash that occurred on May 6, 2010. It was characterized by the rapid decline and recovery of stock and commodity prices over a very short period.   Key Takeaways – 2010 Flash Crash Causes High-Frequency Trading (HFT) Impact Rapid, automated trading by HFT algorithms exacerbated the crash. […]

Pegged orders are a type of order used in trading that automatically adjusts its price based on certain market conditions. These orders are designed to provide traders with more strategic control over their trades, so they remain competitive in changing markets. There are various types of pegged orders, each with its unique features and applications. […]

Liquidity models are used in trading by assessing the ease with which assets can be bought or sold in the market without affecting their price. These are several key concepts and liquidity model types that are important for traders, investors, and policymakers to understand – especially for traders who may impact markets with the sizes […]

Swap pricing models are used in the financial industry for valuing and managing interest rate swaps, currency swaps, commodity swaps, and other types of swaps. These models help determine the fair value of swaps, which are agreements between two parties to exchange cash flows based on specified variables. The complexity of swap contracts, which may […]