From the course: Algorithmic Trading and Stocks Essential Training

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Short-term vs. long-term quantitative strategies

Short-term vs. long-term quantitative strategies

From the course: Algorithmic Trading and Stocks Essential Training

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Short-term vs. long-term quantitative strategies

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- [Instructor] It's important to understand that when we talk about algorithmic trading, even though we use a single term, algorithmic trading, there's really sort of two sides to this coin: high-frequency trading versus factor models. So let's start by talking about high-frequency trading. Now, this is just one example of a research paper from SSRN related to high-frequency trading. But basically, the important thing to note when we talk about high-frequency trading is that it is extremely high speed. So these numbers vary over time, but typically, races, that is the high-frequency trades that occur, are taking place in a tiny fraction of a second, anywhere from 1/1000th in a very slow high-frequency trade to a few millionths of a second. And these high-frequency trades are basically all about trying to capitalize on market microstructure. That is, opportunities between the bid and the ask for a particular stock that can…

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