High-speed market connections and information processing improve the ability to seize trading opportunities, raising gains from trade. They also enable fast traders to process information before slow traders, generating adverse selection, and thus negative externalities. When investing in...

[eng] Price formation in dealer markets : a synthesis of recent litterature. . Dealers provide liquidity to the market by standing ready to buy at their bid priee and sell at their ask priee. By doing so they incur 3 types of costs : (i) order handling costs (ii) the cost of holding undesired,...