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
Texas Tech University
CUHK Business School, The Chinese University of Hong Kong; University of Michigan at Ann Arbor - Ross School of Business
University of California, Riverside
Lehigh University - Department of Finance
There 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:
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
