Trade Management Flashcards
What is trading infrastructure?
The framework of systems, processes, and technologies that facilitate trading in financial markets.
True or False: Trading infrastructure includes only the software used for trading.
False
Fill in the blank: The primary function of trading infrastructure is to support ________ execution.
order
What are the two main components of trading infrastructure?
Trading platforms and market data feeds.
Which of the following is NOT a component of trading infrastructure? A) Trading platforms B) Market data feeds C) Social media management tools
C) Social media management tools
What role do market data feeds play in trading infrastructure?
They provide real-time information on market prices and trading volumes.
True or False: Risk management systems are part of trading infrastructure.
True
What is the purpose of a trading platform?
To facilitate the execution of buy and sell orders in financial markets.
Name one type of trading strategy that relies heavily on trading infrastructure.
High-frequency trading.
What does API stand for in the context of trading infrastructure?
Application Programming Interface.
Multiple Choice: Which of the following is a benefit of robust trading infrastructure? A) Increased transaction costs B) Improved execution speed C) Reduced data accuracy
B) Improved execution speed
What is latency in trading infrastructure?
The delay between the initiation of an order and its execution.
True or False: Trading infrastructure only supports equity markets.
False
What does the term ‘order management system’ refer to?
A system used to manage and track orders throughout the trading process.
Fill in the blank: ________ systems are used to analyze market data and assist in decision-making.
Analytics
What is a clearinghouse?
An intermediary that facilitates the settlement of trades and reduces counterparty risk.
Multiple Choice: Which of the following is a key aspect of trading infrastructure? A) Marketing strategies B) Financial regulations C) Data security
C) Data security
What does ‘front-end’ refer to in trading infrastructure?
The user interface and tools that traders interact with directly.
True or False: Back-end systems are not important for trading operations.
False
What is the significance of disaster recovery in trading infrastructure?
To ensure continuity of trading operations in case of system failures.
Fill in the blank: ________ refers to the methods and technologies used to connect traders to markets.
Connectivity
What role does compliance play in trading infrastructure?
To ensure that trading activities adhere to regulatory requirements.
Multiple Choice: Which system is crucial for monitoring trading activity? A) Social media platform B) Compliance monitoring system C) Inventory management system
B) Compliance monitoring system
What is the function of a risk management system in trading?
To assess and mitigate potential financial losses associated with trading activities.
True or False: Trading infrastructure does not need regular updates.
False
What is the importance of data integrity in trading infrastructure?
To ensure that the data used for trading decisions is accurate and reliable.
