Financial Trading and Investing, Third Edition provides a useful introduction to trading and market microstructure for advanced undergraduate as well as master's students. Without demanding a background in econometrics, the book explores alternative markets and highlights recent regulatory developments, implementations, institutions and debates. The text offers explanations of controversial trading tactics (and blunders) such as high-frequency trading, dark liquidity pools, fat fingers, insider trading and flash orders, emphasizing links between the history of financial regulation and events in financial markets. It includes coverage of valuation and hedging techniques, particularly with respect to fixed income and derivative securities. The text adds a chapter on financial utilities and institutions that provide support services to traders and updates regulatory matters.
Combining theory and application, this book provides a practical beginner's introduction to today's investment tools and markets with a special emphasis on trading.
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Table of Contents
1. Introduction to Securities Trading and Markets 2. Securities Markets 3. Financial Market Utilities and Securities Trading Support 4. Institutional Trading 5. Regulation of Trading and Securities Markets 6. Adverse Selection, Trading, and Liquidity 7. Random Walks, Risk and Arbitrage 8. Arbitrage and Hedging with Fixed Income Instruments and Currencies 9. Arbitrage and Hedging with Options 10. Evaluating Trading Strategies and Performance 11. The Mind of the Investor 12. Market Efficiency 13. Trading Gone Awry
