Algorithmic Trading in Turbulent Markets

Abstract

As the markets move to a new phase represented by a preponderance of negative news and great spikes in volatility, there is general discomfort with unfamiliar trading patterns of even the most familiar of names. At the same time, regulatory changes and competition have fueled a steady progression of electronic trading automation and venue choices, adding new complexities and pressures. This article discusses the necessity for adopting new trading practices in a market where the forces of automation and uncertainty are rising in parallel with increasing volatility. It investigates market trends by illustrating changes in commonly used trading metrics.