The New Secondary Market Structure: Competition, Dark Pools, Algorithmic and High-Frequency Trading

Abstract

There has been a dramatic change in equity market structure in the last ten years, not just in the UK and the US but throughout Continental Europe and Asia. Understanding the new structure is difficult and, for a trader, executing in the new structure is much more complex than in the past, i.e. under a single ‘Stock Exchange’ using order-driven trading alongside broker/dealers offering OTC market-making. To put it in the language of the SEC, the market structure today is fragmented and complex.