High‑Frequency Trading in the Modern Market Microstructure: Opportunities and Threats
https://doi.org/10.26794/2308-944X-2019-7-3-25-36
Abstract
The article covers some ideas about the research on high-frequency trading and financial market design. The topic is time-relevant because today there exists a need to convince traders that there is a simple structural floor in the way that the financial markets are designed. The article reveals the significance of trading on the floor that the foremost fundamental constraint is limited time. The author proves that time on the financial market feels, to some extent, infinite when someone counts it in millions of seconds, but time is nevertheless finite. The author then gets into the actual research on high-frequency trading in the financial market design. The motivation for this project is to analyse activity among high-frequency trading firms by which investments of substantial sums of money are understood as economically trivial speed improvements. The theoretical significance of the research’s outcomes lies in outlaying the systemic approach to dealing with stochastic control problems in the context of financial engineering. The practical relevance of the paper lies in the mechanism that allows solving problems surrounding optimal trading, market microstructure, high-frequency trading, etc. The article concludes by talking about the issues in the modern electronic markets and by giving lessons to dealing with them in the long run.
Keywords
Supporting agencies: The article is as part of the fundamental research titled The Formation of a Regime Favouring the development of digital Technologies conducted at the budgetary expense out of funds donated to the Financial University.
About the Author
M. Zharikov
Financial University
Russian Federation
Russian Federation
Mikhail Zharikov, doctor of Economics, World Economy and World Finance Department, Professor; Institute for World Economy and International Finance Studies, Senior Scientific Fellow
Moscow
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Review
For citations:
Zharikov M. High‑Frequency Trading in the Modern Market Microstructure: Opportunities and Threats. Review of Business and Economics Studies. 2019;7(3):25-36. https://doi.org/10.26794/2308-944X-2019-7-3-25-36
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