program trading


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program trading,

a form of securities trading, also known as index arbitrage. Program traders exploit the price discrepancies between indexes of stocks and futures contracts by using sophisticated computer models to hedge positions. Program trading (also called computer-assisted trading) arose with the advent of computer and telecommunication technologies, whereby trade in different markets could be monitored simultaneously and manipulated accordingly. Because the size of the transactions often caused massive jolts in the stock market, many concluded that program trading was largely responsible for the 500-point drop in the Dow Jones Industrial AverageDow Jones Average,
indicators used to measure and report value changes in representative stock groupings on the New York stock exchange. There are four different averages—industrial stocks, transportation stocks, utility stocks, and a composite average of all three.
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 on Oct. 19, 1987. During the economic recession that followed, the New York Stock Exchange put new restrictions on computerized trading, and many companies refused to do business with any brokerage house that engaged in program trading. With the unprececented growth of the stock market in the later 1990s, program trading saw a resurgence in some trading houses.
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When there is a higher proportion of program trading in the market, we find that the negative impact on cancellation latency due to ATS, CTQ, and TTQ is reduced.
According to (Chiang et al., 2012), this paper is aimed to study the stochastic dominance relations of program trading strategies in China's stock market and tests the efficiency of program trading strategies.
This article examines whether program trading should be classified as a type of noise trading or as a type of information trading.
Asked to identify their concerns, respondents most frequently mentioned program trading, volatility, and their feeling that the market was controlled by large institutional investors.
The strategy of portfolio/program trading of lists of securities simultaneously has been around for some 15 years, but only in the last few has it generated interest and controversy Program trading currently constitutes about 10 percent of a typical day's volume on the New York Stock Exchange and is most commonly used by large institutional money managers, pension funds, and their broker/dealers.
There has been so much criticism of program trading that it sounds like the biggest criminal on Wall Street since Ivan Boesky.
In these and other cases, press accounts have pointed accusingly at the use of "computerized program trading," a term reminiscent of science fiction movies about feuding computers that start nuclear wars.
Ian Cummings said: “During the previous years, we joined among other 20 brokerage firms as top players in the US derivatives and program trading as measured by international traders association and with this recognition, we immediately decided to extend our trading service through the development of our cash equities division.
Summary paragraph: Hongsong Chou, head of quantitative analytics and algorithms, Asia-Pacific, and Robert Laible, global co-head of electronic trading and QPS sales and head of program trading sales, Asia-Pacific, Nomura, explore the value brokers can add to execution performance.
Make no mistake about it, the long-run survival and vitality of our domestic securities market does not depend primarily on the introduction of circuit breakers, prohibitions on program trading, restrictions on index arbitrage, tighter short-sale restrictions, or any other intrusive regulatory mechanisms.
Curley joins BTIG from Deutsche Bank, where he was a Director of Global Program Trading. Previously, he was an Executive Director of Global Portfolio Trading at J.P.
Commenting on the latest addition of three Senior Trading professionals to the global Cash Equities Divisions of FG Solutions International George McCreary said: “During the previous years, we joined among another 20 brokerage firms as top players in the US derivatives and program trading as measured by international traders association and with this recognition, we immediately decided to extend our trading service through the development of our cash equities division.

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