A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks, which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies which are sold to investors through equity crowdfunding platforms. Investment is usually made with an investment strategy in mind.
Day trading is a form of speculation in securities in which a trader buys and sells a financial instrument within the same trading day, so that all positions are closed before the market closes for the trading day to avoid unmanageable risks and negative price gaps between one day's close and the next day's price at the open. Traders who trade in this capacity are generally classified as speculators. Day trading contrasts with the long-term trades underlying buy-and-hold and value investing strategies. It is made easier using day trading software. Day trading is similar to swing trading, in which positions are held for a few days.
The Securities Exchange Act of 1934 is a law governing the secondary trading of securities in the United States of America. A landmark of wide-ranging legislation, the Act of '34 and related statutes form the basis of regulation of the financial markets and their participants in the United States. The 1934 Act also established the Securities and Exchange Commission (SEC), the agency primarily responsible for enforcement of United States federal securities law.
The Montreal Exchange, formerly the Montreal Stock Exchange (MSE), is a derivatives exchange, located in Montreal, Quebec, Canada that trades futures contracts and options on equities, indices, currencies, ETFs, energy and interest rates. Since 1965, it has been located in the Tour de la Bourse, Montreal's third-tallest building. It is owned by the Toronto-based TMX Group.
An electronic communication network (ECN) is a type of computerized forum or network that facilitates the trading of financial products outside traditional stock exchanges. An ECN is generally an electronic system that widely disseminates orders entered by market makers to third parties and permits the orders to be executed against in whole or in part. The primary products that are traded on ECNs are stocks and currencies. ECNs are generally passive computer-driven networks that internally match limit orders and charge a very small per share transaction fee.
The OTC (Over-The-Counter) Bulletin Board or OTCBB was a United States quotation medium operated by the Financial Industry Regulatory Authority (FINRA) for its subscribing members. FINRA closed the OTCBB on November 8, 2021.
Algorithmic trading is a method of executing orders using automated pre-programmed trading instructions accounting for variables such as time, price, and volume. This type of trading attempts to leverage the speed and computational resources of computers relative to human traders. In the twenty-first century, algorithmic trading has been gaining traction with both retail and institutional traders. It is widely used by investment banks, pension funds, mutual funds, and hedge funds that may need to spread out the execution of a larger order or perform trades too fast for human traders to react to. A study in 2019 showed that around 92% of trading in the Forex market was performed by trading algorithms rather than humans.
Open outcry is a method of communication between professionals on a stock exchange or futures exchange, typically on a trading floor. It involves shouting and the use of hand signals to transfer information primarily about buy and sell orders. The part of the trading floor where this takes place is called a pit.
A trading room gathers traders operating on financial markets. The trading room is also often called the front office. The terms "dealing room" and "trading floor" are also used, the latter being inspired from that of an open outcry stock exchange. As open outcry is gradually replaced by electronic trading, the trading room becomes the only remaining place that is emblematic of the financial market. It is also the likeliest place within the financial institution where the most recent technologies are implemented before being disseminated in its other businesses.
Direct market access (DMA) is a term used in financial markets to describe electronic trading facilities that give investors wishing to trade in financial instruments a way to interact with the order book of an exchange. Normally, trading on the order book is restricted to broker-dealers and market making firms that are members of the exchange. Using DMA, investment companies and other private traders use the information technology infrastructure of sell side firms such as investment banks and the market access that those firms possess, but control the way a trading transaction is managed themselves rather than passing the order over to the broker's own in-house traders for execution. Today, DMA is often combined with algorithmic trading giving access to many different trading strategies. Certain forms of DMA, most notably "sponsored access", have raised substantial regulatory concerns because of the possibility of a malfunction by an investor to cause widespread market disruption.
In finance, a dark pool is a private forum for trading securities, derivatives, and other financial instruments. Liquidity on these markets is called dark pool liquidity. The bulk of dark pool trades represent large trades by financial institutions that are offered away from public exchanges like the New York Stock Exchange and the NASDAQ, so that such trades remain confidential and outside the purview of the general investing public. The fragmentation of electronic trading platforms has allowed dark pools to be created, and they are normally accessed through crossing networks or directly among market participants via private contractual arrangements. Generally, dark pools are not available to the public, but in some cases, they may be accessed indirectly by retail investors and traders via retail brokers.
Koscom is a Korean financial IT company launched by the Ministry of Finance (MOSF) and the Korea Exchange (KRX) in 1977. It has five corporate divisions with providing IT infrastructure to the Korean financial securities and futures market. Koscom also offers online stock trading systems that enable users to access to financial database and place trades by Home Trading System or using a customized terminal for professional traders in securities as well as other electronic financial services. Major Korean financial firms have subscription to the Koscom's online trading services including market news, price quotes and financial market data.
An electronic trading platform is a piece of computer software that allows users to place orders for financial products over a network with a financial intermediary. These products include products such as stocks, bonds, currencies, commodities, and derivatives. The first widespread electronic trading platform was Nasdaq. The availability of such trading platforms to the public has encouraged a surge in retail investing.
High-frequency trading (HFT) is a type of algorithmic financial trading characterized by high speeds, high turnover rates, and high order-to-trade ratios that leverages high-frequency financial data and electronic trading tools. While there is no single definition of HFT, among its key attributes are highly sophisticated algorithms, co-location, and very short-term investment horizons. HFT can be viewed as a primary form of algorithmic trading in finance. Specifically, it is the use of sophisticated technological tools and computer algorithms to rapidly trade securities. HFT uses proprietary trading strategies carried out by computers to move in and out of positions in seconds or fractions of a second.
R. Scott Morris is an American author, financial engineer and quantitative consultant. He is president of Morris Consulting, LLC, Chief Investment Strategist of Blackthorne Capital Management, LLC, and served as CEO of the Boston Options Exchange from 2006-08. He has also served as Managing Director of Goldman Sachs and Partner at Hull Trading Company.
High Speed Vendor Feed also known as HSVF is the market data vendor protocol of the Electronic Sola Trading platform currently being used for the dissemination of market data for options, futures, Forwards and other exchange-listed derivative securities for five major derivative exchanges globally which include the following:
Smart order routing (SOR) is an automated process of handling orders, aimed at taking the best available opportunity throughout a range of different trading venues.
Bloomberg Tradebook, LLC., the agency broker of Bloomberg L.P., serves global investment advisors, money managers, hedge funds, proprietary desks and broker dealers, with access to global trading venues, proprietary trading algorithms, execution consulting services, pre-and-post trade analytics and independent research. Through a trading platform integrated with the Bloomberg Professional service, Bloomberg Tradebook provides its customers with direct market access to more than 110 markets and global trading solutions for equities, futures, and options across 44 countries, as well as 43 currency pairs. Tradebook offers over 55 proprietary algorithms designed for each asset class and market.
Interactive Brokers LLC (IB) is an American multinational brokerage firm. It operates the largest electronic trading platform in the U.S. by number of daily average revenue trades. The company brokers stocks, options, futures, EFPs, futures options, forex, bonds, and funds.
Securities market participants in the United States include corporations and governments issuing securities, persons and corporations buying and selling a security, the broker-dealers and exchanges which facilitate such trading, banks which safe keep assets, and regulators who monitor the markets' activities. Investors buy and sell through broker-dealers and have their assets retained by either their executing broker-dealer, a custodian bank or a prime broker. These transactions take place in the environment of equity and equity options exchanges, regulated by the U.S. Securities and Exchange Commission (SEC), or derivative exchanges, regulated by the Commodity Futures Trading Commission (CFTC). For transactions involving stocks and bonds, transfer agents assure that the ownership in each transaction is properly assigned to and held on behalf of each investor.
