High‐Frequency Trading and The Execution Costs of Institutional Investors

Jonathan Brogaard; T. Hendershott; Stefan Hunt; Carla Ysusi;

RELATED

Related Papers     Patents    Grants    Venues    Experts    Cite    Share    Save

ABSTRACT

This paper studies whether high-frequency trading (HFT) increases the execution costs of institutional investors. We use technology upgrades that lower the latency of the London Stock Exchange to obtain variation in the level of HFT over time. Following upgrades, the level of HFT increases. Around these shocks to HFT institutional traders’ costs remain unchanged. We find no clear evidence that HFT impacts institutional execution costs.

 Paraphrase     Questionfy     Wikify     Simplify     Summarize