How Algorithmic Markets and Trading Systems Work

Distinguish alpha generation, portfolio construction, execution, accounting, and risk control within a systematic trading stack.

Compare equities and futures in terms of contract structure, leverage, liquidity, trading hours, and principal risks.

Explain how bid, ask, spread, depth, and liquidity affect an algorithm's attainable price.

Predict how market, limit, and stop orders interact with the order book and time-in-force constraints.

Trace the lifecycle of an algorithmic order from signal generation through execution, clearing, and settlement.

Calculate long- and short-position P&L after commissions, spread costs, and financing or futures variation margin.

Identify how corporate actions, futures expiration, and contract rolls alter historical prices and positions.

Translate a trading idea into a falsifiable hypothesis with a defined signal, holding period, benchmark, and rejection criterion.