High-Frequency Trading - History

High-Frequency Trading: Environment

How High-Frequency Trading environment looks like?
Technology Then and Now

High-frequency trading has taken place at least since the 1930s.

The rapid-fire computer-based HFT developed gradually since 1983 after NASDAQ introduced a purely electronic form of trading.

Securities trading methods and techniques have come a long way since the early 18th century when they were carried out in a commodities market on Wall Street.

Until as recently as in 1960s, the financial information spread slowly, and the trading wad almost entirely manually. 

ADOPTION OF MODERN TECHNOLOGY

In 1971, the National Association of Securities Dealers Automated Quotations (NASDAQ) adopted the electronics technologies in stock markets and started the introduction of quotation system. 

In 1976, he Designated Order Turnaround (DOT) system was introduced in the New York Stock Exchange (NYSE), allowing the electronic transmission of orders to buy and sell securities.

If you are interested to see the technology and financial environment that were adopted in 1980s, then movie Wall Street (1987) is an excellent choice. 

In year 2009, SuperDOT was replaced by the new NYSE Super Display Book system (SDBK) for processing orders.

In 2012, Display Book was replaced by Universal Trading Platform (UTP).

High Frequency Trading environment NOW

What is High Frequency Trading?

It is a form of algorithmic based financial trading which include range of operations. It is faster and more efficient than convention low-frequency trading. 

 

What is Marketing? 

Marketing Definitions

“Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with other”.  - Philip Kotler’s

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. - American Marketing Association

The enigma of marketing is that it is one of man’s oldest activities and yet it is regarded as the most recent of the business disciplines. - Michael J. Baker, Marketing: Theory and Practice, 1st Edn, Macmillan, 1976

Management . . . the technique, practice, or science of managing or controlling; the skilful or resourceful use of materials, time, etc. - Collins Concise English Dictionary

What is Product Life Cycle concept?

Product Life Cycle (PLC) concept

The PLC concept draws an analogy between biological life cycles and the pattern of sales growth exhibited by successful products. It has four important stages are: introduction; growth; maturity; and decline

Marketing myopia – a watershed

It is a short-sighted and inward looking approach to marketing which focuses on fulfilment of immediate needs of the company rather than focusing on marketing from consumers’ point of view.

What are the Factors of Marketing Myopia?

Factors that causes Marketing Myopia. 

• When a firm is only engrossed on selling its products and gives less importance to customer relationship building
• Producing goods in massive quantities without bothering about the scale of demand
• Forecasting growth without research
•  A belief in growth as a natural consequence of an expanding population.
• A belief that there is no competitive substitute for the company's major product.
• A pursuit of the economies of scale through mass production in the belief that lower unit cost will automatically lead to higher consumption and bigger overall profits.
• Preoccupation with the potential of R&D)to the neglect of market needs (i.e. a technology push rather than market pull approach). 
• Most of the firms pursuit R&D as a primary goal and most absolute innovations are a result of Research and Development rather than product engineering need to meet the customer needs.