Economics, Econometrics and Finance
4 years ago

High-Frequency Trading Boosts Market Liquidity, Improving Financial Stability.

IEEE Transactions on Computational Social Systems
Analysis of the Impact of High-Frequency Trading on Artificial Market Liquidity
Isao Yagi, Yuji Masuda, Takanobu Mizuta

Paper Summary

The impact of high-frequency trading on market liquidity was analyzed using agent-based simulations. Results showed that market liquidity indicators improved when high-frequency traders participated. Additionally, execution rate was suggested as a new indicator for measuring market liquidity.

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