Hi,
I am just wondering if someone can give an example of these strategies. According to the curriculum the strategy is passive with the opportunistic seizing of liquidity that I do not understand very well.
I understand well if It would fit with low urgency orders and very liquid
Thanks guys
I don’t know what the curriculum says about it but in real life if you’re using that type of algo it won’t post your order to the book and will just jump in and grab lots as they come along.
Similar to a trap door spider.
Or a moray eel.
Or many octopi. (Though, properly, it should be octo_podes_: Greek, not Latin.)
“passive with the opportunistic seizing of liquidity” basically means it posts on the bid (offer) side of the market for buy (sell) orders and has some methodology for crossing the spread and aggressing (taking liquidity) if certain conditions are met.
So If understand well these type of Algo trading is better suited to orders with low urgency and relatively large volume compared to average volume so it could be executed over time taking lots when possible. Am I right ?
Yes, the goal is to minimize market impact while allowing for some aggressive liquidity taking when appropriate.