1-5. Market Mechanics

Another aspect worth considering is that most major stock markets are actual physical buildings located in a city somewhere on the planet, and because different cities around the globe are at different time zones, the actual opening and closing times also vary. On any given date, the Hong Kong Stock Exchange opens at 09:30 AM … Read more

Stock markets typically remain open for a finite number of hours every day, say 9:30 AM to 4:00 PM. This is when the majority of the transactions take place. Why you ask? Well, traders and exchange operators are humans just like you and me. They need to go back to their families, sleep, and live … Read more

Besides the current price of a particular stock. Another metric that traders liked to keep an eye on is the number of shares that are being traded over a period of time known as volume. Often shown along the bottom of an OHLC chart. The sum of unit price times volume gives you a more … Read more

Investors like to focus on pieces of data that are most important. One way to do that, is to take the tick data and bucket it into regular intervals of time. It could be minutes, hours, days, months, extra. Then summarize all the trades that happened during each interval using measures that are relevant to … Read more

Stock exchanges publish a stream of data that includes each individual trade. This is known as tick data. Ticks are an intuitive way to gauge the health of a stock or even an entire market. Are investors happy? Are they making money? Are prices generally rising or falling, ect.? For example, you can compare each … Read more

Market makers play an important role in keeping a stock market running smoothly. Imagine what would happen without market-makers? It would be harder to buy or sell stocks at a consistent price. As people start selling a stock, its price would start falling and vice versa. Formally, we say that a market maker provides liquidity. … Read more

Stock markets function in a very similar way. When a company first begins trading publicly it typically picks a value for its stock based on certain company metrics like revenue, profits, assets et cetera. But from that point on, it’s stock prices almost entirely driven by how much demand exists for its stock. But how … Read more

This is Betty. She sells the best fruit. Let’s ask her how she decides what price to sell at. Good morning. Morning. So, if you don’t mind me asking, I was wondering how do you choose the prices for your oranges. Sometimes I see they’re selling at two bucks a pound, some days they’re four … Read more

Now that you know how stock markets work, how trades are executed and how prices are set. We’ll move on and take a closer look at the data you need to pay attention to. Market data forms the basis for quantitative analysis and trading. In addition, there are several other sources of information that you … Read more

This lesson will introduce you to the mechanics behind modern-day stock markets. But not only that, you also build a simple market simulator that matches and executes orders, and sets prices just like a real market. This will give you a better idea of all the activities that keep a market running. These activities generate … Read more