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High-frequency trading and dark pools: a toxic effect on market evolution

19 June 2015
Unease among traditional punters and regulators
Is high-frequency trading leading to reduced participation by genuine investors and borrowers?

Research highlights: High frequency trading and dark pools

Dr Amy Kwan and Dr Richard Philip are bringing new insights to the evolution of financial markets through their research into high-frequency trading and dark pools.

Although the banking sector sees high-frequency trading as beneficial, and most academic studies indicate that it should improve overall market quality, Kwan and Philip’s research confirms the unease among traditional punters and regulators that high-frequency trading may have a toxic effect on the market.

Published work

Kwan A, Masulis R and McInish TH. (2015), ‘Trading rules, competition for order flow and market fragmentation’. Journal of Financial Economics, vol.115:2, pp. 330-48.