FOREIGN EXPERIENCE OF INFORMATION TECHNOLOGY APPLICATION IN EXCHANGE ACTIVITIES

Authors

DOI:

https://doi.org/10.29038/2411-4014-2020-02-99-106

Keywords:

information technology, stock market activity. Stock exchange, high frequency trading, financial markets

Abstract

The article describes foreign experience of influence of information technologies on exchange activity of the world; exploitation of the latest technologies in making forecasts in the financial market based on the analysis of search queries on the Internet; and the priority directions of their application on the domestic stock market are determined.

After engaging computer systems in stock trading, and later deciding whether to perform computer operations in self-selection and information processing, the concept of algorithmic trading or so-called computer trading was born

In order to understand algorithmic trading systems (ie computerized trading), the paper describes the process of trading on the stock exchange on the basis of three stages: pre-trade analysis (processing of information before using data or attracting news to analyze certain features of the market); trading "signal" (choosing the most optimal and profitable asset for bidding) and bidding itself. Pre-trading analysis includes: an alpha model (used to predict the future behavior of financial instruments); risk model and cost model that calculates future costs of trading in financial instruments. The rise of analytically sophisticated computing trading strategies shows that in recent years it has become commonplace for market participants to electronically search for agents and execute a transaction, all of which can be done in seconds. A new style of trading has emerged - high-frequency, where automated systems buy and sell financial instruments on an electronic platform, taking a certain position in just a few seconds. Described as Google search queries, the behavior and emotions of people on social networks can help predict the stock market situation.

The conclusion is made. that for capital market companies, technology provides the opportunity to get ahead and win by orienting the process in the right direction, adapting it to the needs of their own businesses.

References

1. Vavdiichyk I. M. (2017)Suchasnyi stan ta tendentsii rozvytku birzhovoi torhivli v Ukraini [Current state and tendencies of development of stock exchange trade in Ukraine] Retrieved from:: http://global-national.in.ua/archive/15-2017/36.pdf [in Ukrainian].

2. Malyshenko K. A. Faktory, shcho vyznachaiut osoblyvosti fondovoho rynku (n.d) [Factors that determine the features of the stock market] Retrieved from http:// old.bumib.edu.ua/ sites/default/ files/visnyk/ 25_1.pdf [in Ukrainian].

3. HOW TECHNOLOGY IS AFFECTING THE FINANCIAL MARKETS (Jan 29, 2019 [Wall Street] Retrieved from: https://wall-street.com/how-technology-is-affecting-the-financial-markets/ [in England].

4. Lim K.-P., Brooks R. (2010). The Evolution of Stock Market Efficiency Over Tie: A Survey of the Empirical Literature [Journal of Economic Surveys]. Retrieved from: https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-6419.2009.00611.x [in England].

5. De Luca Marco, Szostek Charlotte, Cartlidge John, Cliff Dave (2011) Studies of Interactions Between Human Traders and Algorithmic Trading Systems. [Department of Computer Science, University of Bristol]. Retrieved from: https://pdfs.semanticscholar.org/711e/f95dfa873e06274df93fd12c2b766078a837.pdf [in England].

6. Cliff Dave, Brown Dan, Treleaven Philip. (2010). Technology Trends in the Financial Markets: A 2020 Vision.Retrievedfrom:https://www.researchgate.net/publication/313371531_Technology_Trends_in_the_Financial_Markets_A_2020_Vision [in England].

7. Vandenburgh Christa (2018). The Impact of Technology on the Stock Market. Retrieved from:https://bwstewart.wordpress.com/ 2018/03/19/the-impact-of-technology-on-the-stock-market/ [in England].

8. Johnston Kevin. (n.d) The Impact of Technology on the Stock Market. Retrieved from: https://www.zacks.com/ search.php?q=Kevin+Johnston [in England].

9. Diaz Eva (2016). How Technology is Changing the Way You Trade. [website offering online financial trading news - Finance Magnates]. Retrieved from: https://www.financemagnates.com/ [in England].

10. Kearns M., Kulesza A., Nevmyvaka Y. (2010). Empirical Limitations on High Frequency Trading Profitability. [Journal of Trading]. Retrieved from:http://www.cis.upenn.edu/~mkearns/papers/hft_arxiv.pdf. [in England].

11. Arnuk S., and Saluzzi J. (2012) Broken Markets: How High Frequency Trading and Predatory Practices on Wall Street are Destroying Investor Confidence and Your Portfolio. Retrieved from: http:// ptgmedia.pearsoncmg.com/ images/9780132875240/samplepages/0132875241.pdf [in England].

12. Jelf Owen, Burrows James, Davies Wynn. (2018). CAPITAL MARKETS TECHNOLOGY 2022 Retrieved from: https://www.accenture.com/_acnmedia/pdf-69/accenture-capital-markets-technology-2022.pdf [in England].

13. Tobias Preis, Helen Susannah Moat, H. Eugene. (2013). Stanley Quantifying Trading Behavior in Financial Markets Using Google Trends. Retrieved from: https://www.nature.com/articles/srep01684[in England].

14. Financial Report of Munich Airport (2018) Retrieved from: https://www.munich-airport.com/_b/0000000000000006771266bb5d10d6da/FMG_IB2018_Financial-report.pdf [in England].

15. Shuyuan Deng, Zhijian (James) Huang, Atish P Sinha Huimin Zhao (2018) The Interaction between Microblog Sentiment and Stock Return: An Empirical Examination Retrieved from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3054906 [in England].

Published

2020-06-30

How to Cite

[1]
2020. FOREIGN EXPERIENCE OF INFORMATION TECHNOLOGY APPLICATION IN EXCHANGE ACTIVITIES. Economic journal of Lesya Ukrainka Volyn National University. 2, 22 (Jun. 2020), 99–106. DOI:https://doi.org/10.29038/2411-4014-2020-02-99-106.