Introduction To Trade Execution, Arbitrage and Dealing in Australia (Pearson Original Edition)

Introduction To Trade Execution, Arbitrage and Dealing in Australia (Pearson Original Edition)

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A large portion of trading activity in financial markets involves brokers, arbitrageurs and dealers or market makers. The aim of this book is to provide a rigorous yet practical treatment of the principles underlying these types of trading activity. A large and growing body of research in finance deals with such activity, and appears in the literature commonly referred to as the security market microstructure literature.

The book provides a review of the securities market microstructure literature concerned with trade execution, arbitrage and market making. Wherever possible, the principles developed in research are illustrated through worked examples and illustrations.
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Product details

  • Paperback | 122 pages
  • Pearson Custom Publishing
  • Frenchs Forest, Australia
  • Tables; graphs
  • 1442505397
  • 9781442505391

Table of contents

Chapter 1 Introduction to the Securities Market
1.1 Introduction to equity and derivatives markets
1.2 Main investors in Australian securities markets
1.3 Trading
Chapter 2 Trading Costs and Order Execution
2.1 Introduction
2.2 Transaction cost components
2.3 Trading cost analysis
2.4 Strategies for reducing market impact costs
Chapter 3 Equity Arbitrage
3.1 Introduction
3.2 Pure arbitrage
3.3 Speculative arbitrage
3.4 Equity arbitrage
3.5 The risks of equity arbitrage
3.6 Static hedging and equity arbitrage
3.7 Hypothetical convergence and pairs trading
3.8 Dynamic hedging
3.9 Futures/options arbitrage
Chapter 4 Dealing and Market Making
4.1 Introduction
4.2 How does a dealer make money by selling high and buying low? Description of a typical dealer's trades
4.3 How does a dealer provide liquidity? Description of typical situations when a dealer provides liquidity
4.4 What are the costs and risks of a dealer and how do they protect themselves against these risks?
4.5 Dealing and market-making decisions
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