Simulated Trading Game

Description

 

This is a Simulated Trading Game post-game report. The goal of the trading game is to examine the relationship between market structure and price formation process with heterogeneously informed participants.

Here is some information about the trading games.

 

 

In the first game, it is a “LIT_LIT” market, that is, two venues both display market depth. In the second game, it is “LIT_DARK” market, that is, one does while the other trading venue does not display market depth. The information of the two trading games is provided below.

 

First:

End of the game: Total cash: 112.50; Total shares: 17; True Value:6.73; Net position 226.93

 

Second:

End of the game: Total cash: 96.90; Total shares: 10; True Value:3.65; Net position 133.44

 

In the report, you should discuss the objectives of the two trading games and describe your expectations and observations of the market. Report should include:

1.Calculate profit in each game. No need to make comment on that.

  1. A discussion on what you would expect to observe in the trading behavior given

different information (black, black), (black, white), (white, black) and (white, white),

together with your expectation on the trade price series; and

  1. An analysis on market quality measures (i.e., bid-ask spread, volume and possibly

depth) and a comment on price efficiency (i.e., deviation from the true value).

  1. Figures and tables are strongly recommended to be included as appendices.

 

Structure

  1. Heading
  2. Calculate profit of the first game
  3. Discussion about the first game
  4. Analysis about the first game
  5. Calculate profit of the second game
  6. Discussion about the second game
  7. Analysis about the second game

 

Each trading game have a trading log and I have attached them. When you are working on market quality measures analysis you can refer to the logs. Followed are instruction about logs.

 

And that’s all for the description. Word limit is 900 words, no format requirement. Thank you and would be appreciate your hard work.

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