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Computerization of the Equity, Foreign Exchange, Derivatives, and Fixed Income Markets

The Financial Review, Forthcoming

18 Pages Posted: 28 Jul 2010 Last revised: 9 Aug 2015

Laura Cardella

Texas Tech University

Jia Hao

CUHK Business School, The Chinese University of Hong Kong; University of Michigan at Ann Arbor - Ross School of Business

Ivalina Kalcheva

University of California, Riverside

Yung-Yu Ma

Lehigh University - Department of Finance

Multiple version iconThere are 2 versions of this paper

Date Written: January 10, 2013

Abstract

We survey empirical studies on the development and effects of increased computerization across equity, foreign exchange, derivatives, and fixed-income markets. While the changes in the trading process due to computerization in less liquid markets such as the corporate bond market have been modest, there have been dramatic changes in certain derivatives markets, foreign exchange, and in particular equity markets. In many instances, previous research has found positive effects of computerization on measures of market quality, but our survey highlights that human intermediation is still prominent and beneficial in certain areas.

Keywords: automation, electronic trading, computerized trading, human intermediation

JEL Classification: G1, G2

Suggested Citation

Cardella, Laura and Hao, Jia and Kalcheva, Ivalina and Ma, Yung-Yu, Computerization of the Equity, Foreign Exchange, Derivatives, and Fixed Income Markets (January 10, 2013). The Financial Review, Forthcoming . Available at SSRN: https://ssrn.com/abstract=1650345 or http://dx.doi.org/10.2139/ssrn.1650345

Laura Cardella

Texas Tech University ( email )

Lubbock, TX 79409
United States

Jia Hao

CUHK Business School, The Chinese University of Hong Kong ( email )

Shatin, N.T.
Hong Kong
852-3943-1914 (Phone)

HOME PAGE: http://www.bschool.cuhk.edu.hk/index.php/faculty-staff/show-alltest?pid=2&sid=1226:HAO-Jia

University of Michigan at Ann Arbor - Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-647-1690 (Phone)

Ivalina Kalcheva (Contact Author)

University of California, Riverside ( email )

900 University Avenue
Riverside, CA 92521
United States

Yung-Yu Ma

Lehigh University - Department of Finance ( email )

621 Taylor Street
Bethlehem, PA 18015
United States

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