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David Weisberger
Traders Magazine Online News

ICOs: Financial Innovation or Modern Day Scam?

In this new blog series from CoinRoutes, the potential for ICOs to enable public participation in the funding of new blockchain related technology ventures being important is discussed.

Traders Poll

As firms and venues begin to report trade data to the CAT, what is your biggest concern with the system and data?






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Determining the estimated auction volume is crucial.

Outside the U.S. markets, auctions are a big part of how equity trading gets done. Determining the estimated auction volume in a particular stock is crucial to getting a piece of the auction and having your order executed fully and properly. Watch this video from Bloomberg Tradebook and take the mystery out of the auction process. Check out the other Bloomberg Tradebook videos below. For more information, visit www.bloombergtradebook.com.

Q&A

Q: Why are the closing auctions such a big part of European trading vs other markets?

A: There are a few reasons that might explain why closing auctions are such a big part of the trading volume in Europe. A) Trading volume in general increases into the close due to the closing price being a common benchmark for funds, this phenomenon could be greater in Europe because by that time of day news from the US markets has time to disseminate and that could drive some PMs to make a late day buy or sell decision for European stocks. B) There are very few exchanges where after hours trading can happen in Europe, so the closing auction is the best last chance to trade. C) Volume begets volume, the more trading gets done in the closing auction the more likely traders would want to participate in that volume so they don't miss out on it.

Q: What happens in the first 30 minutes that enables an algorithm to estimate the closing auction more accurately?

A: Each day is unique, Bloomberg Tradebook's quantitative group found that the accuracy of estimating the closing auction in any market greatly improve after 30 minutes of trading happens on that day. The key factor of this insight is very basic, after 30 minutes you have can have 10-20% of the days volume already accounted for and if that volume is very low or very high compared to the average it tends to be a good estimate of the whole days trading volume and even the closing auction.

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About Insight Bites in 60 Seconds

When it comes to stock trading, so much is changing so quickly that it’s difficult to understand and manage all the variables. Whether it’s algorithmic trading, price swings or dark liquidity, The Insight Bites series presents smart and concise snapshots of what a trader can do to address and overcome the most pressing of these challenges. Hosted by Traders Magazine and brought to you by Bloomberg Tradebook, each 60 second animated video provides quick and humorous insight into a unique issue that traders face every day. For more information, visit www.bloombergtradebook.com.