What do retail FX traders learn?

What is the benefit of experience? Using data from a leading trading platform we find no evidence that retail FX traders learn to trade better, but they do appear to learn about their innate abilities as traders and respond appropriately. In particular, following an unsuccessful trading day, they are more likely to cease trading, to trade smaller amounts and to trade less frequently. These effects are stronger for younger and less experienced traders who might be expected to have more to learn than older, more experienced traders. As regards learning through experience, surprisingly we find that more seasoned traders demonstrate a slight decline in performance once we account for the endogenous decision to cease trading, and even very experienced traders consistently lose money

Banning short sales and market quality: The UK's experience

We study the effects that the ban on short sales of shares in financial firms introduced in late 2008 and removed early 2009 had on the microstructure and the quality of UK equity markets. We show that the ban did nothing to affect order flows: financial stocks were being more aggressively sold off than their peers pre-ban and this situation persisted through the ban period. Trading volume in financials was massively reduced, however. The ban decimated order book liquidity for financials. The deterioration was symmetric, affecting the limit buy and limit sell side of the order book equally. Finally we show that, through the period of the ban, markets for financial stocks were substantially less efficient and that the role of the trading process in aiding price discovery was greatly reduced. The effects identified above were largely reversed once the ban was lifted. The persistence of the deterioration in market quality and liquidity though the relatively long-lasting UK ban on short selling suggests that other major market developments such as the TARP program were not responsible since these were concentrated in the early half of the ban. We thus argue that the short selling ban was responsible for detrimental effects on the quality of UK equity markets and that, far from being stabilising, the ban exacerbated problems in valuing UK financial stocks

Ultrafast harmonic mode-locking of monolithic compound-cavity laser diodes incorporating photonic-bandgap reflectors

We present the first demonstration of reproducible harmonic mode-locked operation from a novel design of monolithic semiconductor laser comprising a compound cavity formed by a 1-D photonic-bandgap (PBG) mirror. Mode-locking (ML) is achieved at a harmonic of the fundamental round-trip frequency with pulse repetition rates from 131 GHz up to a record high frequency of 2.1 THz. The devices are fabricated from GaAs-Al-GaAs material emitting at a wavelength of 860 nm and incorporate two gain sections with an etched PBG reflector between them, and a saturable absorber section. Autocorrelation studies are reported which allow the device behavior for different ML frequencies, compound cavity ratios, and type and number of intra-cavity reflectors to be analyzed. The highly reflective PBG microstructures are shown to be essential for subharmonic-free ML operation of the high-frequency devices. We have also demonstrated that the single PBG reflector can be replaced by two separate features with lower optical loss. These lasers may find applications in terahertz; imaging, medicine, ultrafast optical links, and atmospheric sensing

High-frequency information content in end-user foreign exchange order flows

This article considers the impact of foreign exchange (FX) order flows on contemporaneous and future stock market returns using a new database of customer order flows in the euro-dollar exchange rate market as seen by a leading European bank. We do not find clear contemporaneous relationships between FX order flows and stock market changes at high frequencies, but FX flows do appear to have significant power to forecast stock index returns over 1–30 min horizons, after controlling for lagged exchange rate and stock market returns. The effects of order flows from financial customers on future stock market changes are negative, while the effects of corporate orders are positive. The latter results are consistent with the premise that corporate order flows contain dispersed, passively acquired information about fundamentals. Thus, purchases of the dollar by corporate customers represent good news about the state of the US economy. Importantly, though, there also appears to be extra information in corporate flows which is directly relevant to equity prices over and above the impact derived from stock prices reacting to (predicted) exchange rate changes. Our findings suggest that financial customer flows only affect stock prices through their impact on the value of the dollar

Variability Flagging in the Wide-field Infrared Survey Explorer Preliminary Data Release

The Wide-field Infrared Survey Explorer Preliminary Data Release Source Catalog contains over 257 million objects. We describe the method used to flag variable source candidates in the Catalog. Using a method based on the chi-square of single-exposure flux measurements, we generated a variability flag for each object, and have identified almost 460,000 candidate sources that exhibit significant flux variability with greater than ~7σ confidence. We discuss the flagging method in detail and describe its benefits and limitations. We also present results from the flagging method, including example light curves of several types of variable sources including Algol-type eclipsing binaries, RR Lyr, W UMa, and a blazar candidate

What central banks can learn about default risk from credit markets

This paper is part of papers included in the volume "Market functioning and central bank policy", BIS Papers No 12 August 2002. These were presented and discussed at the Autumn Central Bank Economists' Meeting held at the BIS on 15-16 October 2001. The meeting focused on recent changes in market functioning and their impact on central bank policy. A number of structural developments seem to have had a significant influence on the functioning of financial markets. The most important of these developments are the introduction of the euro, the spread of electronic trading, changes in the constellation and behaviour of market participants and falling supplies of government debt. There is some evidence that such structural changes resulted in shifts in liquidity among different market segments and, moreover, that liquidity is less robust than in the past. The process of price formation and the information conveyed by prices also appears to have been affected. This poses various challenges for central bank policy, including how best to gauge market expectations and conduct monetary policy operations

Discovery of 15-second oscillations in Hubble Space Telescope observations of WZ Sagittae following the 2001 outburst

We report the discovery of 15-s oscillations in ultraviolet observations of WZ Sge obtained with the Hubble Space Telescope approximately one month after the peak of the 2001 outburst. This is the earliest detection of oscillations in WZ Sge following an outburst and the first time that a signal near 15 s has been seen to be dominant. The oscillations are quite strong (amplitude about 5%), but not particularly coherent. In one instance, the oscillation period changed by 0.7 s between successive observations separated by less than 1 hour. We have also found evidence for weaker signals with periods near 6.5 s in some of our data. We discuss the implications of our results for the models that have been proposed to account for the 28-s oscillations seen in quiescence. If the periods of the 15-s oscillations can be identified with the periods of revolution of material rotating about the white dwarf, the mass of the white dwarf must satisfy M_WD > 0.71 M_sun. The corresponding limit for the 6.5-s signals is M_WD > 1.03 M_sun.Comment: accepted for publication in ApJ Letters; 13 pages, 4 postscript figures; new version corrects a few typos and matches version that will appear in ApJ

We see ICT spillovers everywhere but in the econometric evidence: a reassessment

Using company-level data for the US we study the productivity effects of knowledge spillovers, induced by the diffusion of ICT in the markets where companies operate. We adopt multiple spillover proxies and account for firms' absorptive capacity and lagged effects. Our results show that intra-industry ICT spillovers have a contemporaneous negative effect while the impact of inter-industry spillovers is positive. The overall productivity effect of ICT is negative, except for those companies with a strong absorptive capacity. However, after a 5-year lag the overall spillover effect turns positive while the role of absorptive capacity diminishes as a consequence of decreasing learning costs and more accessible technology

SS433:the microquasar link with ULXs?

SS433 is the prototype microquasar in the Galaxy and may even be analogous to the ULX sources if the jets' kinetic energy is taken into account. However, in spite of 20 years of study, our constraints on the nature of the binary system are extremely limited as a result of the difficulty of locating spectral features that can reveal the nature and motion of the mass donor. Newly acquired, high resolution blue spectra taken when the (precessing) disc is edge-on suggest that the binary is close to a common-envelope phase, and hence providing kinematic constraints is extremely difficult. Nevertheless, we do find evidence for a massive donor, as expected for the inferred very high mass transfer rate, and we compare SS433's properties with those of Cyg X-3.Comment: 4 pages, 3 figures, to appear in "Compact binaries in the Galaxy and beyond