Reseña del libro "Trading Perspectives Liquidity and Markets (en Inglés)"
I get to dive into countless books, and I must say, this oneis an absolute delight. No need for any unnecessary delay, let megive you a sneak peek into what makes it so worthwhile. Areyou ready? Let's jump right in with the introduction!.Welcome tothe world of financial markets, where intricate systems and economic principles shape theway assets are traded, prices are determined, and market structures evolve. This book aimsto shed light on the complex interplay between microeconomics, finance, macroeconomics, and information systems within the context of trading, liquidity, transaction costs, and market structure. By exploring these subjects through the lens of theequity market and incorporating the impact of trading costs and other impediments, weuncover a deeper understanding of real-world market dynamics.One of the commonthreads that binds these diverse topics is our focus on the effect of "frictions" on marketoutcomes. These frictions encompass the various barriers and limitations that affecttrading activities, such as transaction costs and regulatory constraints. By delving intothese impediments, we gain valuable insights into how they shape market behavior andinfluence market participants' decision-making processes.In this book, we also introducean interactive simulation model of equity market trading, providing you with a uniqueopportunity to engage with the material in an informative and enjoyable way. Throughthis simulation tool, you can actively explore the intricacies of market dynamics anddeepen your understanding of how real-world markets function.Each chapter in this bookhas been carefully designed as a standalone module, making it suitable for integration intoexisting finance, economics, or information science courses. However, while each chaptercan stand on its own, there are interconnected themes and concepts that weavethroughout the entire book. By reading the entire work, you will gain a morecomprehensive understanding of the workings of a real-world financial market.Let usbegin our journey with Chapter 1: "Understanding Economic Behavior." In thismicroeconomics chapter, we challenge the commonly held assumption of frictionlessmarkets and explore its implications. By comparing the Capital Asset Pricing Model andthe microeconomics consumer choice model, both built on the assumption of frictionlessmarkets, we uncover the optimal decision-making processes of investors and consumers.However, when analyzing the equity market, we introduce the real-world constraint oforder submission, limiting each participant to a single order. This constraint allows us todemonstrate how prices in the financial marketplace can differ from the theoreticallyderived equilibrium values of a frictionless model.
