While the US equity market has changed dramatically in recent years with automation gradually transforming the market from a human-intermediated market to a computer-intermediated one with little human interaction, researchers Angel, Harris and Spate found that trading problems remain unchanged as traders still face the same challenges as before the automation. These challenges include: minimisation of total trading costs including commissions, bid/ask spreads, large traders remain careful about trading interest exposure, etc.
The market has also changed significantly in terms of volume trading that has grown substantially, and where the mean trade size has fallen as traders are now able to divide orders to obtain better executions due to the usage of electronic systems. All this presents implications for those who are into equity trading and will continue to define the way in which trading takes place for the next few years, until technology redefines it again.
To read more, visit – http://www.worldscientific.com/doi/pdf/10.1142/S2010139211000067.
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