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Real-Time Risk Irene Aldridge

Real-Time Risk By Irene Aldridge

Real-Time Risk by Irene Aldridge


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Summary

Risk management solutions for today's high-speed investing environment Real-Time Risk is the first book to show regular, institutional, and quantitative investors how to navigate intraday threats and stay on-course. The FinTech revolution has brought massive changes to the way investing is done.

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Real-Time Risk Summary

Real-Time Risk: What Investors Should Know About FinTech, High-Frequency Trading, and Flash Crashes by Irene Aldridge

Risk management solutions for today's high-speed investing environment Real-Time Risk is the first book to show regular, institutional, and quantitative investors how to navigate intraday threats and stay on-course. The FinTech revolution has brought massive changes to the way investing is done. Trading happens in microsecond time frames, and while risks are emerging faster and in greater volume than ever before, traditional risk management approaches are too slow to be relevant. This book describes market microstructure and modern risks, and presents a new way of thinking about risk management in today's high-speed world. Accessible, straightforward explanations shed light on little-understood topics, and expert guidance helps investors protect themselves from new threats. The discussion dissects FinTech innovation to highlight the ongoing disruption, and to establish a toolkit of approaches for analyzing flash crashes, aggressive high frequency trading, and other specific aspects of the market. Today's investors face an environment in which computers and infrastructure merge, regulations allow dozens of exchanges to coexist, and globalized business facilitates round-the-clock deals. This book shows you how to navigate today's investing environment safely and profitably, with the latest in risk-management thinking. * Discover risk management that works within micro-second trading * Understand the nature and impact of real-time risk, and how to protect yourself * Learn why flash crashes happen, and how to mitigate damage in advance * Examine the FinTech disruption to established business models and practices When technology collided with investing, the boom created stratospheric amounts of data that allows us to plumb untapped depths and discover solutions that were unimaginable 20 years ago. Real-Time Risk describes these solutions, and provides practical guidance for today's savvy investor.

About Irene Aldridge

IRENE ALDRIDGE is managing director and quantitative portfolio manager at ABLE Alpha Trading and president of ABLE Markets. She is author of Searching for High-Frequency Trading Opportunities and High-Frequency Trading. STEVE KRAWCIW is CEO of ABLE Markets, a leader in market microstructure analytics. His experience comes from such firms as McKinsey & Co. and Credit Suisse, and he is coauthor (with Irene Aldridge) of Quant Investor Almanac 2011.

Table of Contents

Acknowledgments xi CHAPTER 1 Silicon Valley Is Coming! 1 Everyone Is into Fintech 3 The Millennials Are Coming 7 Social Media 9 Mobile 10 Cheaper and Faster Technology 13 Cloud Computing 14 Blockchain 15 Fast Analytics 15 In the End, It s All About Real-Time Data Analytics 18 End of Chapter Questions 19 CHAPTER 2 This Ain t Your Grandma s Data 21 Data 21 The Risk of Data 23 Technology 27 Blockchain 30 What Elements Are Common to All Blockchains? 31 Conclusions 39 End of Chapter Questions 39 CHAPTER 3 Dark Pools, Exchanges, and Market Structure 41 The New Market Hours 51 Where Do My Orders Go? 52 Executing Large Orders 54 Transaction Costs and Transparency 56 Conclusions 57 End of Chapter Questions 57 CHAPTER 4 Who Is Front-Running You? 59 Spoofing, Flaky Liquidity, and HFT 64 Order-Based Negotiations 78 Conclusions 80 End of Chapter Questions 81 CHAPTER 5 High-Frequency Trading in Your Backyard 83 Implications of Aggressive HFT 89 Aggressive High-Frequency Trading in Equities 96 Aggressive HFT in US Treasuries 98 Aggressive HFT in Commodities 99 Aggressive HFT in Foreign Exchange 101 Conclusions 102 End of Chapter Questions 102 CHAPTER 6 Flash Crashes 103 What Happens During Flash Crashes? 104 Detecting Flash-Crash Prone Market Conditions 116 Are HFTs Responsible for Flash Crashes? 124 Conclusions 126 End of Chapter Questions 127 CHAPTER 7 The Analysis of News 129 The Delivery of News 130 Preannouncement Risk 139 Data, Methodology, and Hypotheses 143 Conclusions 154 End of Chapter Questions 154 CHAPTER 8 Social Media and the Internet of Things 155 Social Media and News 160 The Internet of Things 165 Conclusions 169 End of Chapter Questions 170 CHAPTER 9 Market Volatility in the Age of Fintech 171 Too Much Data, Too Little Time Welcome, Predictive Analytics 174 Want to Lessen Volatility of Financial Markets? Express Your Thoughts Online! 175 Market Microstructure Is the New Factor in Portfolio Optimization 176 Yes, You Can Predict T + 1 Volatility 178 Market Microstructure as a Factor? You Bet. 179 Case Study: Improving Execution in Currencies 183 For Longer-Term Investors, Incorporate Microstructure into the Rebalancing Decision 184 Conclusions 185 End of Chapter Questions 185 CHAPTER 10 Why Venture Capitalists Are Betting on Fintech to Manage Risks 187 Opportunities for Disruption Are Present, and They May Not Be What They Seem 189 Data and Analytics in Fintech 191 Fintech as an Asset Class 192 Where Do You Find Fintech? 194 Fintech Success Factors 194 The Investment Case for Fintech 196 How Do Fintech Firms Make Money? 198 Fintech and Regulation 198 Conclusions 200 End of Chapter Questions 200 Authors Biographies 201 Index 203

Additional information

CIN1119318963VG
9781119318965
1119318963
Real-Time Risk: What Investors Should Know About FinTech, High-Frequency Trading, and Flash Crashes by Irene Aldridge
Used - Very Good
Hardback
John Wiley & Sons Inc
20170414
224
N/A
Book picture is for illustrative purposes only, actual binding, cover or edition may vary.
This is a used book - there is no escaping the fact it has been read by someone else and it will show signs of wear and previous use. Overall we expect it to be in very good condition, but if you are not entirely satisfied please get in touch with us

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