Equity Trading in the 21st Century

摘要: The U.S. equity market changed dramatically in recent years. Increasing automation and the entry of new trading platforms has resulted intense competition among platforms. Despite these changes, traders still face same challenges as before. They seek to minimize total cost including commissions, bid/ask spreads, impact. New technologies allow implement traditional strategies more effectively. For example, dark pools indications interest are just an updated form tactics that NYSE floor used search for counterparties while minimizing exposure their clients’ prevent front running. Virtually every measurable dimension quality improved. Execution speeds retail commission have fallen. Bid-ask spreads fallen remain low, although they spiked upward along with volatility during financial crisis. Market depth increased. Studies institutional transactions costs find lowest world. Unlike Crash 1987, mechanism handled increase volume without disruption. However, our markets lack a market-wide risk management system would deal computer generated chaos real time, regulators should address this. “Make or take” pricing, charging access fees orders “take” liquidity paying rebates limit “make” liquidity, causes distortions be corrected. Such charges not reflected quotations measurement best execution. Direct by non-brokers requires appropriate management. Front running correlated securities banned.