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Category: Essential Concepts for Level II

Essential Concept 101: Types of Electronic Traders

The major types of electronic traders include: Electronic news traders: These traders profit based on news. They subscribe to high speed electronic news services. They process news releases extremely fast and place trade based on their analysis. Electronic dealers: Like other dealers, electronic dealers also earn profits through their bid-ask spreads. However, at first signs that prices may move against their inventory position, they immediately take liquidity by executing on the opposite side and reduce their exposure. Electronic arbitrageurs: These traders monitor multiple markets to look for arbitrage opportunities. Electronic front runners: These are low-latency traders who use AI methods… Read More

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