Algorithms enable investors to locate trading opportunities, which raises gains from trade. Algorithmic traders can also process information on stock values before slow traders, which generates adverse selection. We model trading in this context and show that, for a given level of algorithmic...

The advances in trading technologies and networking infrastructures combined with the globalisation and competitive environment of the financial markets has increased the complexity and dynamics of markets making them difficult to understand and has raised a number of issues in relation to the...