David Cheriton has once told “stupid latency”. The term latency always has hindered the trading. A network with low bandwidth can also be used to compete with the high bandwidth networks in trading. But a high latency network can never be matched with the low latency network. Let us understand this better. Say Boeing 747 is carrying 500 passengers and Boeing 737 is carrying 150 passengers. Can you say that the Boeing 747 will travel faster than Boeing 737? No. Both the planes travel at 500 kmpf. Thus they reach the destination at same time duration. But if there is a latency in any one plane, then it reaches little late than the other one. Latency is a very important factor in algorithmic trading.
This article is to discuss on the efficiency of the tool R in designing and back testing the trading strategies. But before getting in to the concepts of designing and back testing using R, we will have a simple introduction for this tool. What is R? R is nothing but the open source that has about 18,000 members in the Linkedln’s groups and 80 R meet up groups are there in existence now. This open source provides about 4000 packages for an efficient designing of strategies. This is a tool that perfectly matches the needs of data analysis, which is a must in strategy designing.
There has been heated debate on algorithm based trades. Amidst this debate, Rakesh Jhunjhunwala, an ace investor, has backed this kind of trading and has even raised questions on the need to regulate this form of trading.
Rakesh Jhunjhunwala even told reporters that he does not agree that there should be regulations for algorithm (algo) based trading. He also said that regulation of algo trading and norms to do the same should be brought in only in case of enough evidence of manipulation in the market. Rakesh Jhunjhunwala also said that any method of trading can be used by an investor. The method can be technical also but that does not mean that it is an incorrect method. He vehemently said that just because someone is doing algo trading, that investor should not be regulated and that regulations should not be there unless there is strong and solid evidence that the trading is being done to manipulate the stock market prices.
The Volkswagen emissions scandal has left a dark spot on the company’s future and reputation, with the company facing billions of dollars in fines from governments worldwide and the prospect of recalling nearly 11 million cars, Volkswagen suppliers are now feeling the heat with its equipment supplier Schaeffler cutting back on production and lowering targets.
The Japan Post Holdings Co has set a price range this Wednesday for its IPO share, which has brought it to be near to the ‘must listings’. Each share has been sold in a price range 1100 to 1400 yen on this Wednesday. And the IPO of the company also has been set at $12 billion which is near to the privatization worth. Also this is going to be the largest IPO that the Japan has ever seen in the past three decades. Soon the Japan post holdings will be listed in to the must listings as the shares are still expected to go high.
The initial stage marketers usually will go with a misunderstanding that electronic trading is nothing but automated trading. But on the other side, both may work on same medium, but has different meanings. The electronic medium is the one in which people will involve in trading via electronic medium, say computer. But an automated medium is the one in which the intervention of human is very less or almost absent in many processes. Instead of humans, the algorithms are used. These algorithms are capable of taking decisions and they follow certain protocols for successful trading. Some of those protocols are discussed in this article.