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

Published date01 May 2014
Date01 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).
C2014 The Eastern Finance Association 173

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