Edgar Perez, author of The Speed Traders: An Insider's Look at the New High-Frequency Trading Phenomenon That Is Transforming the Investing World, will provide a session on Key Enablers for High Frequency Trading at The Speed Traders Workshop 2012 Seoul: How High Frequency Traders Leverage Profitable Strategies to Find Alpha in Equities, Options, Futures and FX, March 28th. Among other topics, Mr. Perez will discuss:
• Technological innovation: computing power, complex event processing, and low-latency bandwidth
• Shift to electronic trading and the rise of alternative trading systems
• In-depth look at strategies high frequency traders leverage to find alpha in equities, options, futures and FX
• The profitability of typical high frequency trading strategies and its evolution
As reported by The Wall Street Journal, high-frequency trading, long an obscure corner of the market, has leapt into the spotlight this year. Wildly successful in 2008, high-frequency traders are the talk of Wall Street, attracting big bucks and some unwanted attention. Concerns that some traders are taking advantage of less fleet-footed investors has drawn the attention of regulators and members of Congress. The following is an explanation of the core issues, based on interviews with industry participants and regulators.
Definitions differ, says Scott Patterson and Geoffrey Rogow, but at its most basic, high-frequency trading implies speed: Using supercomputers, firms make trades in a matter of microseconds, or one-millionth of a second. Goals vary. Some trading firms try to catch fleeting moves in everything from stocks to currencies to commodities. They hunt for "signals," such as the movement of interest rates, that indicate which way parts of the market may move in short periods. Some try to find ways to take advantage of subtle quirks in the infrastructure of trading. Other firms are "market makers," providing securities on each side of a buy and sell order. Some firms trade on signals and make markets.
Many high-frequency traders collect tiny gains, often measured in pennies, on short-term market gyrations. They hunt for temporary "inefficiencies" in the market and trade in ways that can make them money before the brief distortions go away. Market-making, high-frequency firms hope to make money on the difference between how much investors are willing to buy and sell a stock, or the "bid-ask spread." They do this by selling and buying on both sides of the trade. Many exchanges offer "rebates" of about one-third of a penny a share to outfits that are willing to step up and provide shares when needed.
The Speed Traders Workshop 2012 Seoul will reveal how high-frequency trading players are succeeding in the global markets and driving the development of algorithmic trading at breakneck speeds from the U.S. and Europe to India, Singapore and Brazil. The Speed Traders Workshop 2012 Seoul kicks off a series of presentations in the world's most important financial centers: Kuala Lumpur, Malaysia, April 11; Doha, Qatar, April 18; Warsaw, Poland, May 11; Kiev, Ukraine, May 18; Singapore, May 26; Shanghai, China, June 6; Jakarta, Indonesia, June 13; Mexico City, Mexico, July 27; Hong Kong, August 4, and Moscow, Russia, August 10.
Mr. Perez is widely regarded as the preeminent speaker and networker in the specialized area of high-frequency trading. He has been featured on CNBC Cash Flow (with Oriel Morrison), CNBC Squawk Box (with Geoff Cutmore), BNN Business Day (with Kim Parlee), TheStreet.com (with Gregg Greenberg), Channel NewsAsia Asia Business Tonight and Cents & Sensibilities (with Lin Xue Ling), NHK World, iMoney Hong Kong, Hedge Fund Brief, The Wall Street Journal, The New York Times, Dallas Morning News, Los Angeles Times, TODAY Online, Oriental Daily News and Business Times. He has been engaged as speaker at Harvard Business School's 17th Annual Venture Capital & Private Equity Conference, High-Frequency Trading Leaders Forum 2011 (New York, Chicago, Hong Kong, Sao Paulo, Singapore), CFA Singapore, Hong Kong Securities Institute, Courant Institute of Mathematical Sciences at New York University (New York), Global Growth Markets Forum (London), Technical Analysis Society (Singapore), TradeTech Asia (Singapore), FIXGlobal Face2Face (Seoul), and 2nd Private Equity Convention Russia, CIS & Eurasia (London), among other global forums.
Mr. Perez is one of the great business networkers and motivators on the lecture circuit; he is available worldwide for the following speaking engagements: Present and Future of High-Frequency Trading, The Real Story behind the "Flash Crash", Networking for Financial Executives, and Business Networking for Success.