Flash Boys Help Markets, Not Just Themselves, BOE Study Finds
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A year after Michael Lewis’s book brought the supposed menace of high-frequency trading to public attention, researchers at the Old Lady of Threadneedle Street suggest speedy trading may not be so bad for markets after all.
Electronic trading makes stock markets more efficient by enabling them to react more quickly to new information, the Bank of England working paper concluded. The authors took the FTSE 100 Index’s 20 largest stocks and examined how they traded on the London Stock Exchange in the four months through the end of 2012. They compared the trades of 10 HFT firms with the orders placed by 10 investment banks.