Date of Award
Spring 2021
Degree Name
Bachelor of Science (BS)
Advisor(s)
Yusif Simaan
Abstract
After reading the New York Times Bestseller Flash Boys as well as many articles claiming that High Frequency Trading adversely affects capital markets, I was perplexed as to why HFT hadn’t become a bigger public controversy over the past decade, so I searched for the other side of the story. I found many counterarguments and explanations for the market dynamics Lewis blames on high frequency traders. I also found research attempting to quantify the impact of HFT on financial markets. I struggled, however, to find an unbiased analysis of the numbers and arguments put forth. That is the goal with this research. Through extensive literature review and interviews with insiders coming from all angles, this paper paints a clear, unbiased picture of what high frequency trading really is and distinguishes the different strategies employed. We analyze the market impact of those strategies and conclude whether or not the effects of HFT are positive, negative, or both, and how it should be regulated in the future.
Recommended Citation
O'Rourk, Erin, "The Evolution, Market Impact, and Regulation of High Frequency Trading" (2021). Gabelli School of Business Honors Thesis Collection. 48.
https://research.library.fordham.edu/gabelli_thesis/48
