Question

In: Finance

Are ATPs (Automated Trading Platforms) going to be a threat to the existence of human brokers?

Are ATPs (Automated Trading Platforms) going to be a threat to the existence of human brokers?

Solutions

Expert Solution

Yes, it is considered as threat to human brokers. Followings are the reasons behind it:

  • Automated trading platforms are algorithm trading which is a computer program generates automatic orders based on the rules of trading strategy.
  • These are electronic trading platforms in automated market centers, exchanges and other trading institutions.
  • ATPs can wipe out repetitive tasks and perform much faster than human equivalent. Now a days trading curbs are in place to manage risk factors associated with the portfolio position. So it will be much more effective than before.
  • It is considered as threat to brokers because it is able to achieve higher order entries which is extremely beneficial for the current market.
  • These systems will reduce human processing errors and increases production efficiency.
  • It allow users to trade in multiple accounts with diversifying their portfolio. As a result risk will also get mitigated and net earnings will rise.
  • So the need for human brokers is no more required and customers don't have to pay brokerage commission. It will attract the investors to opt for it and reduce their cost expenses.
  • Mean reverting time series method in ATPs will maintain data consistency. So that in trading platforms all settlement will be checked properly. It is not possible through brokers.

Hence ATP is the advanced technology which will improves the trading productivity.

All the best for your exam! Thank you!


Related Solutions

Are ATPs (Automated Trading Platforms) going to be a threat to the existence of human brokers?
Are ATPs (Automated Trading Platforms) going to be a threat to the existence of human brokers?
Do the existence of SIFIs represent a threat to the ecnomic stability of the country? Why...
Do the existence of SIFIs represent a threat to the ecnomic stability of the country? Why or why not? Explain how the post great-recession regulations tried to deal with this issue.
First, list a few of the derivatives trading platforms in the US and in some of...
First, list a few of the derivatives trading platforms in the US and in some of the other advanced economies. Then, briefly discuss at least two (02) such platforms in the United States and in another developed country (or countries), with some recent data. What are your views about these developments in, say, the last decade or so?
Some say that the rapid growth of machine learning and automated systems are going to be...
Some say that the rapid growth of machine learning and automated systems are going to be a threat to the amount of available jobs for people. Do you think that this is a possible scenario?  Or do you think it will generate jobs in other yet unseen areas? Would you have interest in being a part of programming these next-gen automated systems?  Why or why not?
From the perspective of being an Operational Manager for Office Administration Investigating Trading Platforms, describe your...
From the perspective of being an Operational Manager for Office Administration Investigating Trading Platforms, describe your business structure. a) Suggest ONE contributing factor that may make this the preferred structure in a department. b)Request information from TWO other departments (Accounting and HR) that could assist in your investigation
What kinds of technology pose the greatest threat ( automated robotics, super computers, cyborgs, androids)? answer...
What kinds of technology pose the greatest threat ( automated robotics, super computers, cyborgs, androids)? answer with examples please
Human complacency and apathetic behaviors are considered to be major factors responsible for the continued threat...
Human complacency and apathetic behaviors are considered to be major factors responsible for the continued threat of microbial disease, particularly in the developed world. 1. Define complacency as it relates to microbial disease. 2. Do you agree with this statement? Yes or no? 3. If yes, please provide a general example or a personal anecdote supporting this statement. If no, explain why.
The existentialist is interested in addressing various areas of human existence. In this prompt please address...
The existentialist is interested in addressing various areas of human existence. In this prompt please address in a page how one lives authentically and what living authentically looks like. Do you think you live authentically, why or why not? In order to fully address this prompt, you should reference either Nietzsche or Sartre or both. A little help: reference Nietzsche’s views on herd mentality. Or Sartre’s notion of “bad faith” or both and how they may, or may not, apply...
What is the Allegory of the Cave? What is Plato trying to describe about human existence...
What is the Allegory of the Cave? What is Plato trying to describe about human existence using this allegory? Have you ever had a time when you have “left the cave” only to return with a new understanding of your former world? If you are unclear on any of the elements of Plato’s philosophy use the discussion board to ask questions to gain a better understanding of the philosophy from your peers. (answer should be at least 200 words)
There are as many human development theories as there are people in existence. Cross-cultural psychology focuses...
There are as many human development theories as there are people in existence. Cross-cultural psychology focuses on the psychological aspects of other cultures. (Matsumoto, 2001) Some theories explain the cultural impact on human development, while others are broader and focus on the individual. Some human development theories view culture as an antecedent or consequence of individual behavior, as well as enabling or restricting this behavior. For example, the theories of Bronfenbrenner and Vygotsky focus on the cultural influences of behavior,...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT