Business Knowledge for IT in Trading and Exchanges: A Complete Handbook for IT Professionals

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"Business Knowledge for IT in Trading and Exchanges" deals with the alignment of IT and business in Trading and the Exchanges (market in which securities, commodities, options or futures are traded) where trading takes place. The idea behind this publication is to introduce IT professionals to the concepts of the trading in the financial markets. The chapters in the book cover the following topics: Overview of Trading; Products traded at the Exchanges; Overview of Major Exchanges and Trading firms such as brokerages; Trends in Trading; Types of Traders; Systems used for trading and in the exchanges; Theoretical Concepts underpinning Liquidity and Volatility; And much more. The innovations in Trading and IT to be discussed include: Direct Market Access (DMA); Straight through Processing; Algorithmic Trading; Cloud Computing and Infrastructure optimisation and more. Contributors to this book include Nasdaq OMX, Intel, Ullink, Horizon Software, SunGard and Progress Software. "Business knowledge for IT in Trading and Exchanges" is an invaluable reference handbook for IT professionals. It is also useful for both undergraduate and graduate students in Information Technology - related degree programmes. This is another publication in the "Bizle Professional Series". It is uniquely designed to be easy-on-the-eye and flexible. The book is concise ensuring that readers don't get distracted by superfluous information. Table Of Contents Preface Acknowledgements Contents Introduction 1. Overview of Trading and Exchanges Introduction The Players in Trading History of Trading Traders’ and Investors’ Roles in the Marketplace Trading Sessions Insider Trading History of Exchanges The Business of Running Exchanges Three Business Models for the Stock Exchange Industry The Global Exchange Industry 2. Trading in Different Asset Classes Introduction Definition of an Asset Class The Trading Life Cycle Trading in Equities Trading in Fixed Income Trading in Foreign Exchange 3. Types of Order Introduction Benefits of Using Orders Some Essential Terms Market Orders Limit Orders Stop Orders Stop-Limit Orders Trailing Stop Orders Tick-Sensitive Orders Market-If-Touched Orders Market-Not-Held Orders Other Order Instructions 4. The Business Environment Introduction Environmental Factors affecting the Trading Industry Competitive Landscape Profile of Major Exchanges around the World Profile of Major Players in Trading Clearing and Settlement Firms Depositories and Custodians Mechanics of T+3 Settlement Cycle Credit Rating Agencies Indices Security Identifier Types 5. Trends in Trading and Exchanges Introduction The Growth of Electronic Communication Networks The Growth of Algorithmic Trading Trading in CFDs Trading of Structured Products Emergence of Retail FX Trading Popularity of Spread Betting Rise of Fixed-Odds Betting Increasing Popularity of Direct Market Access Popularity of Day Trading Popularity of Swing Trading The Emergence of Liquidity Pools The Emergence of E-minis The Rise of Exchange-Traded Funds 6. Liquidity and Volatility Introduction Definition of Liquidity The Search for Liquidity Dimensions of Liquidity Liquidity Demanders and Suppliers Volatility Trading in Volatile Market Conditions The Volatility Index 7. Concept of Arbitrage Introduction Definitions of Arbitrage Theoretical Underpinnings of Arbitrage Types of Arbitrage Conclusion 8. Electronic and Algorithmic Trading Introduction Definition of Electronic Trading Differences between Electronic Systems and Traditional Markets Overview of Electronic Market Structures Interaction between Various Market Participants in Electronic Trading Electronic Trading in Different Asset Classes Algorithmic Trading Algorithmic Strategies Transaction Cost Analysis 9. Common Systems Used in Trading and Exchanges Introduction Comparison of Open Outcry and Automated Trading Systems The Procedure of Online Order Execution Profiles of Systems List of Other Systems Factors Driving Users’ Choice of Electronic Trading Platforms 10. IT Projects Introduction Implementation of Electronic Trading Systems Implementation of Cloud Computing in Exchanges Case Study on the Implementation of Cloud Computing Infrastructure Optimisation – Front to Back Office –  Trade to Settlement 11. Commonly Used Terminology Introduction List of Terms 12. The Future The Future: What does it hold for IT and Business in Trading and Exchanges? Consolidation in the Exchange Sector Increased Competition from Alternative Execution Venues Increasing Role of Technology in Trading Emergence of New Trading Hotspots Changes in the Nature of Trading How did Credit Derivatives contribute to the Credit Crunch? Conclusion Appendix Bibliography