Database Reference
In-Depth Information
Figure 2-1. Data for the price of trades of IBM stock during the last minute of trading on one day
of the NYSE. Each trade is marked with a semi-transparent dot. Darker dots represent multiple
trades at the same time and price. This one stock traded more than once per second during this
particular minute.
It may seem surprising to look at a very short time range in such detail, but with this high-
frequency data, it is possible to see very short-term price fluctuations and to compare them to
the behavior of other stocks or composite indexes. This fine-grained view becomes very im-
portant, especially in light of some computerized techniques in trading included broadly un-
der the term “algorithmic trading.” Processes such as algorithmic trading and high-frequency
trading by institutions, hedge funds, and mutual funds can carry out large-volume trades in
seconds without human intervention. The visualization in Figure 2-1 is limited to one-second
resolution, but the programs handling trading for many hedge funds respond on a millisecond
Search WWH ::




Custom Search