PhD researcher Mathijs Giltjes challenges financial regulation expert Piebe Teeboom – Secretary General of FIA European Principal Traders Association (FIA EPTA) - on several issues relating to high frequency trading in financial markets. What is high frequency trading and what role does it play in modern financial markets? Can high frequency trading increase risks for market manipulation or insider dealing in some cases?
The discussion in the episode touches upon both the benefits and risks posed by high frequency trading. This practice, made possible by algorithmic trading technology, is argued to provide liquidity to markets where that is sorely needed, and to cut transaction costs, increasing efficiency. On the other hand, some have expressed concern that firms engaged in high frequency trading may profit from market volatility - including during the onset of the COVID-19 pandemic in early 2020. Whilst some traders find they have an edge due to the adoption of new technologies, others feel they are left behind. The question arises whether those at the front of the technology race should be restrained by law. Is further regulation needed? In episode three of Law Out Loud, Mathijs challenges Piebe on various tricky aspects related to high frequency trading and is met with some well-argued responses.
Episode 3: Mathijs and Piebe: “High Frequency Trading in Financial Markets”
Host: Liam Wells
Junior: Mathijs Giltjes
Senior: Piebe Teeboom
Law Out Loud
In Law Out Loud we turn the table between senior and junior researchers/experts. The research question of every PhD candidate is unique, and so even a Professor can learn something from those at the very earliest stage of their careers! In every episode of the series, a PhD researcher – our junior researcher – gets the opportunity to explain their research to a senior academic/expert in the same field. The senior, in turn, seeks to learn from the junior and contribute related insights from their own research. The topics in the series cover legal responses to new social, economic, environmental, and technological developments. These range from: consumer protection under new business models, to the rise of high frequency trading in the stock market, and the use of new forms of dispute resolution in addition to the courts.
Law Out Loud is funded by the Erasmus Graduate School of Law, and each episode is produced and edited by EGSL PhD researchers: Liam Wells, Josje de Vogel, Sophia Paulini and Georgia Antonopoulou.