Computerization of the Equity, Foreign Exchange, Derivatives, and Fixed‐Income Markets
13 Pages Posted: 8 Apr 2014
Date Written: May 2014
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 particularly in 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
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Computerization of the Equity, Foreign Exchange, Derivatives, and Fixed‐Income Markets
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