High-frequency trading and conflict in the financial markets

Abstract : The last few decades has seen an ever-increasing growth in the way activities are productized and associated with a financial cost. This phenomenon, termed financialization, spans all areas including government, finance, health and manufacturing. Recent developments within finance over that past decade have radically altered the way trading occurs. This paper analyses high-frequency trading (HFT) as a necessary component of the infrastructure that makes financialization possible. Through interviews with HFT firms, a software vendor, regulators and banks, the effects of HFT on market efficiency, and its impact on costs to long-term investors are explored. This paper contributes to the literature by exploring the conflict that exists between HFT and traditional market makers in today’s fragmented markets. This paper argues that society should be unconcerned with this conflict and should instead focus on the effects these participants have on the long-term investors, for whom the markets ultimately exist. In order to facilitate the best outcomes, regulation should be simple, aimed at keeping participants’ behavior stable, and the interactions among them transparent and straightforward. Financialization and HFT are inextricably linked, and society is best served by ensuring that the creative energy of these market participants is directed on providing liquidity and removing inefficiencies.
Type de document :
Article dans une revue
Journal of Information Technology, Palgrave Macmillan, 2017, 32 (3), pp.270 - 282. 〈10.1057/s41265-016-0031-5〉
Liste complète des métadonnées

http://hal-audencia.archives-ouvertes.fr/hal-01668026
Contributeur : Sylvia Cheminel <>
Soumis le : mardi 19 décembre 2017 - 17:17:23
Dernière modification le : mercredi 20 décembre 2017 - 01:21:08

Identifiants

Collections

Citation

Ricky Cooper, Jonathan Seddon, Ben Van Vliet. High-frequency trading and conflict in the financial markets. Journal of Information Technology, Palgrave Macmillan, 2017, 32 (3), pp.270 - 282. 〈10.1057/s41265-016-0031-5〉. 〈hal-01668026〉

Partager

Métriques

Consultations de la notice

17