SS16, algorithmic trading

Can you give some examples of 1) opportunistic strategies and 2) specialized strategies?

What are the differences between the two?

opportunistic is participation based, passive and depends on inefficiencies which cannot be predicted as to timing of occurrence.

specialized is quite systematic ( algo based ) and depends on a statistical model ( usually proprietary ). It is an active strategy in that it doesn’t wait for an opportunity to pup up but trades based on a pattern in the market usually.

Thanks, janak. It helps.

Just throw some buzzwords I got from the book. It seems that some opportunistic strategies are also mentioned in paragraph of specialized stratgey.

1, Pegging and discretion strategy. 2, Hunter strategy 3, Market-on-close algorithm 4, Smart routing

Only the first two are opportunistic strategies?

Uh oh… i don’t know any of those 4 strategies, is this a new study session? I would check but that little finquiz side by side is no longer available.

I’m not sure, it’s probably there last year. I got here(P46) from “hunter strategy” in Schewer slides.

Hunter strategy is listed in the book as “Specialized”, however I think it has properties of both classifications as it “opportunistically” searches for liquidity. I am not familiar with Pegging and Discretion, however since it has the word “Discretion” in the name I would go with opportunistic.

Market-on-Close and Smart routing both take advantage of trade patterns, so I would say both are spacialized.