Algorithmic Trading and Market Microstructure

Summary

This chapter examines how algorithmic trading, high-frequency trading (HFT), and market microstructure dynamics affect IR timing and disclosure strategies. You'll understand the impact of algorithmic trading on markets, how HFT affects stock price movements, market microstructure fundamentals, liquidity provision mechanisms, order flow analysis, and the importance of time-sensitive disclosures. Understanding these market dynamics is critical for IR professionals to optimize disclosure timing, anticipate market reactions, and manage communications in an increasingly automated trading environment.

Concepts Covered

This chapter covers the following 9 concepts from the learning graph:

1. Algorithmic Trading Impact
2. High-Frequency Trading
3. Market Microstructure
4. Providing Liquidity
5. Analyzing Order Flow
6. Time-Sensitive Disclosures

Prerequisites

This chapter builds on concepts from:

• Chapter 1: Foundations of Modern Investor Relations
• Chapter 2: Regulatory Frameworks and Compliance
• Chapter 3: Investor Types and Market Dynamics
• Chapter 7: Sentiment Analysis and Predictive Analytics

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