DOI
10.18151/7217338
Abstract
The financial services industry is among the leading industries in IT-spending. Still, little research exists which investigates how IT influences the financial services sector. Against this background, we study how a technology which emerged within the last years affects securities trading: High-Frequency Trading (HFT). Hereby, we focus on HFT and its impact on market efficiency. On the basis of a long-term analysis, we find that HFT decreases price dispersion among two distant markets. Analyzing the introduction of the German HFT Act, we further observe that the price dispersion between two leading trading venues for German blue chip securities increased. We conclude that HFT increases market efficiency in the European market landscape by transmitting information between distant markets.
Recommended Citation
Haferkorn, Martin, "High-frequency Trading and its Role in Fragmented Markets" (2015). ECIS 2015 Completed Research Papers. Paper 65.
ISBN 978-3-00-050284-2
https://aisel.aisnet.org/ecis2015_cr/65