Part 1: Market Foundations

Imagine you want to buy or sell something — say a share of Apple stock. Where do you go? How does the price get decided? And who are the other people you’re trading with? This section answers those questions by walking you through the infrastructure of financial markets, from the “auction houses” where trading happens (exchanges) to the scoreboard that tracks every offer (the order book).

You’ll also learn how to measure whether a trade was good or bad using metrics like returns, volatility, and the Sharpe ratio — and see real-world case studies of when markets went haywire.

Chapters

  1. Market Structure — Exchanges, order books, price discovery, and market participants
  2. Asset Classes — Equities, ETFs, and cryptocurrency characteristics
  3. Trading Mechanics — Order types, execution flow, trading costs, and slippage
  4. Financial Metrics — Returns, volatility, Sharpe ratio, drawdown, alpha, and beta
  5. Historical Context — Flash crash, COVID-19, and GameStop case studies
  6. Market Microstructure — ITCH data format, FIX protocol, bar types, and order flow

Notebook: Run the examples interactively in 01_financial_metrics.ipynb

Table of contents