Market Impact Simulation
Market Impact Simulation is a tool that allows users to see how their proposed trade will affect the market price before they execute it. By analyzing the current order book, the tool calculates the expected price change based on the trade size.
This helps users understand the cost of their trade in terms of market impact and decide whether to break it into smaller orders or adjust their strategy. It is a sophisticated risk management tool that provides transparency into the mechanics of price discovery.
This simulation is critical for large-scale traders who need to minimize their footprint.