Title: Electronic trading and futures market efficiency

Authors: Dan R. Pieptea

Addresses: University of Texas at Dallas, Richardson, TX, 75083-0688, USA

Abstract: This paper analyses the pros and cons of computerized markets for futures contracts. Specifically, it presents the potential of computerized orders matching to resolve unfair trading practices such as inaccurate time and price reporting. front running, dual trading and the possibility of improving futures market efficiency. The political dimension of replacing the open-outcry trading system with electronic trading is considered. The analysis is partially based on experiences with computerized trading systems reported by futures exchanges in the United States, the United Kingdom and Switzerland. Computerized trading around the clock will go a long way towards the globalization of financial markets in the decade of the 1990s, and will improve market efficiency.

Keywords: computerised markets; decision support systems; DSS; electronic trading; futures markets; market efficiency; globalisation; financial markets.

DOI: 10.1504/IJTM.1992.025740

International Journal of Technology Management, 1992 Vol.7 No.6/7/8, pp.471 - 477

Published online: 24 May 2009 *

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