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First published in 1994, “Stock Exchange Automation” sheds light on the crucial role capital markets play in market economics. These markets serve as the backbone of the free market system, acting as a sort of financial referee, distributing investable funds among competing uses.
As our world becomes increasingly automated, it is vital to comprehend how this trend is influencing market behaviour. This book dives deep into this transformation, providing a thorough examination of market microstructure theory and its implications. It posits that certain forms of automation could significantly impact pricing structures.
In addition, the book explores theories of price formation within the specialist-based trading system. According to these hypotheses, the trading mechanism itself can trigger short-term price volatility. This book is a must-read for anyone interested in understanding the complexities of automated markets, price formation, and the broader implications for our financial systems.