The Economics of High-Frequency Trading: Taking Stock

Posted: 18 Nov 2016

Multiple version iconThere are 2 versions of this paper

Date Written: October 2016


I review the recent high-frequency trader (HFT) literature to single out the economic channels by which HFTs affect market quality. I first group the various theoretical studies according to common denominators and discuss the economic costs and benefits they identify. For each group, I then review the empirical literature that speaks to either the models’ assumptions or their predictions. This enables me to come to a data-weighted judgement on the economic value of HFTs.

Suggested Citation

Menkveld, Albert J., The Economics of High-Frequency Trading: Taking Stock (October 2016). Annual Review of Financial Economics, Vol. 8, pp. 1-24, 2016, Available at SSRN: or

Albert J. Menkveld (Contact Author)

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081HV
+31 20 5986130 (Phone)
+31 20 5986020 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics