Special Issue on Computerized and High‐Frequency Trading: Guest Editor's Note

• DOI: http://doi.org/10.1111/fire.12030
• Published date: 01 May 2014
• Date: 01 May 2014

The Financial Review 49 (2014) 173–175

Special Issue on Computerized and

High-Frequency Trading:

Guest Editor’s Note

Michael A. Goldstein*

Babson College

Unlike established topics in finance, such as dividend policy, capital structure,

or asset pricing, computerized and high-frequency trading is a new, emerging, and

rapidly evolving area for the markets,regulators, and the public. The use of computers

to facilitate high-speed and high-frequency trading continues to be a significant topic

in the popular press and public policy debate, including very recently.1

While some are experts, many in academia are relatively unfamiliar with the

relatively new and ever changing issues and research related to high-speed trading.

Therefore, when the editors of The Financial Review (Robert A. and Bonnie F. Van

Ness) asked me to be a guest editor for this special issue on computerized and high-

frequency trading, I was not sure we should compile a “typical” special issue, which

∗Corresponding author: Finance Division, Babson College, 231 Forest Street, Babson Park, MA 02457-

0310; Phone: (781) 239-4402; Fax: (781) 239-5004; E-mail: goldstein@babson.edu.

1The U.S. Securities and Exchange Commission issued a concept release (SEC, 2010) discussing issues

related to computerized and high-frequency trading and the U.K.’s Government Officefor Science spon-

sored an entire Foresight project on “The Future of Computer Trading in Financial Markets” (Foresight,

2012). This area continues to be an area of interest for regulators and the popular press: in December

2013, SEC Commissioner Michael Piwowar called for a comprehensive structural review of current

computer-driven equity markets (Piwowar,2013), and in the first six days of January 2014, the Financial

Industry Regulatory Authority (2014) specifically mentioned algorithmic trading, trading systems, and

high-frequency trading in its list of market regulation and enforcement priorities (FINRA, 2014) and the

Wall Street Journal covered a story on rapid trading and high-speed traders creating a lobbying group

(Hope and Patterson, 2014).

C2014 The Eastern Finance Association 173