Market Microstructure

Limit order book mechanics, adverse selection and inventory management, Almgren-Chriss optimal execution, and market impact estimation — for prop trading, algorithmic trading, and algo-adjacent quant roles.

4 modules~96 min total

Prerequisites

Probability and statisticsBasic optimisation (calculus of variations helpful)Familiarity with financial markets and order types

Modules

01

Limit Order Book Mechanics

Medium
Market MicrostructureLimit Order BookMarket MakingAdverse Selection
02

Adverse Selection and Inventory Models

Hard
Market MicrostructureMarket MakingAdverse SelectionStochastic ControlAvellaneda-Stoikov
03

Almgren-Chriss Optimal Execution

Hard
Market MicrostructureOptimal ExecutionMarket ImpactStochastic ControlAlmgren-Chriss
04

Market Impact Estimation

Hard
Market MicrostructureMarket ImpactKyle ModelPrice ImpactEmpirical Methods