The Economics of Flash Orders and Trading

Journal of Investment Management, Fourth Quarter, 2016

17 Pages Posted: 3 Nov 2011 Last revised: 11 Apr 2017

Lawrence Harris

University of Southern California - Marshall School of Business - Finance and Business Economics Department; Institute for Quantitative Research in Finance (the Q-Group); Interactive Brokers, Inc. (IBKR); University of Pennsylvania - Financial Economists Roundtable

Ethan Namvar

University of California, Berkeley - Haas School of Business; Columbia Business School

Date Written: January 15, 2011

Abstract

This paper surveys some economic principles required to understand the characteristics and effects of flash orders and trading. We present the benefits and current controversies surrounding flash orders. Finally, we offer recommendations that would be of interest to policymakers.

Keywords: flash orders, high frequency trading, algorithmic trading, volatility

JEL Classification: D40, D80, D84, G14, G18, G20, G28

Suggested Citation

Harris, Lawrence and Namvar, Ethan, The Economics of Flash Orders and Trading (January 15, 2011). Journal of Investment Management, Fourth Quarter, 2016. Available at SSRN: https://ssrn.com/abstract=1953524 or http://dx.doi.org/10.2139/ssrn.1953524

Lawrence Harris

University of Southern California - Marshall School of Business - Finance and Business Economics Department ( email )

Marshall School of Business
Los Angeles, CA 90089
United States
213-740-6496 (Phone)
213-740-6650 (Fax)

Institute for Quantitative Research in Finance (the Q-Group) ( email )

Q Group
P.O. Box 1540
Valley Stream, NY 11582
United States

Interactive Brokers, Inc. (IBKR) ( email )

209 South LaSalle Street
10th Floor
Chicago, IL 60604
United States

University of Pennsylvania - Financial Economists Roundtable ( email )

Philadelphia, PA
United States

Ethan Namvar (Contact Author)

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States
510-642-7989 (Phone)

HOME PAGE: http://haas.berkeley.edu

Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

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