Algorithmic Trading & HFT Trading: Hottest Career Options in Technology powered Financial Management

Algorithmic trading and HFT (high-frequency) trading, the technology-driven pre-programmed mathematical model-based trading, which currently accounts for more than half the average daily turnover on some of the bourses in developed countries has gained immense momentum in India over the last few years.
 

With international financial giants, who rely heavily on automated trading for optimum fund management, setting up operations in the country and an ever-increasing number of domestic traders beginning to adopt this internationally popular format, the demand for talented professionals who possess the specialized skills is growing at an unprecedented rate. Furthermore, there is a sharp rise in the number of banks and financial institutions in India who are customizing their algos to differentiate from their competitors. The increased market fragmentation and expansion of cross-asset trading is laying the foundation for next generation trading in India.

A course in Algorithmic trading makes you eligible for over a million high paid job opportunities across the world in sectors like Fund management & consultancy, Advisory, Equity market, Derivatives, Currency, Commodities and Research houses.


The competencies, skills and knowledge that you acquire allow you to vie for some of the best paid jobs in the financial world. Reduced cost of transactions, high-frequency trading option, greater liquidity, increased transparency, greater competition and tighter spreads combined with the ability to monitor and respond to multiple liquidity pools across various asset classes are some of the key reasons behind the increasing popularity of algorithmic trading.


Coping with the sheer volume of data surrounding a trader and using it effectively in today’s competitive scenario often takes more than just the human brain. Electronic trading solutions empower traders to implement strategies which not only tap the data explosions and manage greater trading volumes but do so within timeframes in the order of milliseconds. Some strategies offer the possibility of a risk-free profit at zero cost.

The increasing complexity of financial market puts growing demands on the quality of education of finance professionals. With world class training and comprehensive programs now available in the country, Indians can learn practical skills from successful corporate leaders and experts including seasoned professionals and alumni of Indian Institutes of Technology (IITs), Indian Institutes of Management (IIMs), Massachusetts Institute of Technology (MIT), John Hopkins University (JHU), HSBC, Barclay's, University of Chicago Business School (UCBS) and Indian School of Business (ISB).

Eligibility for courses in Algorithmic Trading– Aptitude and IQ Tests. Students with Economics, Commerce, B.E., B.Tech or MBA background will grasp this course better. Basic knowledge of finance, accounting and valuation concepts is helpful as are basic programming skills, analytical and quantitative skills.

Algorithmic Trading Course Fee – Rs. 60,000 to 4.5 Lakh

Course duration – Ranging from 6 week industrial training programs for executives to a 1 year comprehensive course, the duration depends on the student’s competency levels.

Career Opportunities - Proprietary Trader, Professional Trader, Dealer (Client Trading), Arbitrageurs, Relationship Manager, BDM, Operations (Surveillance, Accounts, Compliance, Co-ordination), Advisory/Research (Technical Analyst, Fundamental Analyst, Portfolio Management),

What is Algorithmic trading?

Also called automated trading or black-box trading, algo trading is the use of electronic platforms for entering trading orders with an algorithm deciding on aspects of the order such as the timing, price, or quantity of the order, or in many cases initiating the order without human intervention.

Execution algorithms which are widely used by pension funds, mutual funds, and other buy side (investor driven) institutional traders, minimize the impact cost while executing large orders by spreading them through the day with price and volume specifications, allowing investors to obtain the best possible price without significantly affecting the stock's price and increasing purchasing costs. Situational algorithms used more by sell side traders such as market makers and some hedge funds are more sophisticated and triggered when certain conditions are fulfilled. For instance, a complex algorithm could generate a buy order depending on a combination of moves in stock price, index level and currency rate.


A special class of algorithmic trading is "high-frequency trading" (HFT), in which computers make elaborate decisions to initiate orders based on information that is received electronically, before human traders are capable of processing the information they observe. High Frequency trading (HFT) volumes are above 70% of the equity market in US, above 50% in Europe and in leading Asian markets such as Japan it is above 40% of the equity market.

Leading Institutes in India offering Courses in Algorithmic Trading

A look at various platforms you can use to learn algorithmic trading in India:

1. Modrika: Modrika offers an Algorithmic Trading Course which is a 1 year program. With a dedicated 40 hours per week module, this course focuses on Financial Statistics and Modeling Concepts and Tools with detail on Instrument Pricing, Portfolio Management and Risk Management followed by insights into trading and arbitrage strategies with each participant developing and implementing their own strategies on simulators. Furthermore, the course also provides a basic introduction to High Frequency Econometrics, market microstructure and Transaction Cost Analysis. The final module deals with Algorithmic Trading system architecture and Optimizing Strategies.

2. Quant Insti: Quant Insti's “Executive Programme in Algorithmic Trading” (E-PAT) is the first of its kind course to focus specifically on financial technology trends, challenges, and their solutions. The Course introduces key concepts, the trade life cycle, and factors driving the growth of electronic trading with an Overview of Electronic and Algorithmic Trading, which defines important ideas and gives a historical perspective on the emergence of program and algorithmic trading. It introduces Financial Statistics and Modeling Concepts and Tools with detail on Instrument Pricing, Portfolio Management and Risk Management.

3. Kredent Academy: It offers a course called “Comprehensive Algorithmic Trader” (CALT) with Quant Insti.

Author: Mr. Arun Singh,Director Indian Operations, Modrika.

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