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Towards a Fully Automated Stock Exchange (Part 1) – Fischer Black (1971) 

Full Article: Fischer Black

FNL Exclusive: This brilliant article by Fischer Black predicts how technology and electronic trading will change equity market structure. 

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  • Wolfman
    WolfmanJuly 7, 2017"So for the bond geeks who read FN, the obvious parallel is specialist is to equities as dealer is to bonds. I don't think it's that simple or that direct. Small average trade size with a large number of participants are ingredients for a continuous market. BTW, I like the idea of participating orders to help specialists! We don't have that today, but we do have market orders which, in a continuous market, are the equivalent to what Dr. Black proposed. The automation o…"

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Wolfman
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So for the bond geeks who read FN, the obvious parallel is specialist is to equities as dealer is to bonds. I don’t think it’s that simple or that direct. Small average trade size with a large number of participants are ingredients for a continuous market. BTW, I like the idea of participating orders to help specialists! We don’t have that today, but we do have market orders which, in a continuous market, are the equivalent to what Dr. Black proposed. The automation of the fixed income market will come, but it will not parallel equities. Those who will drive… Read more »
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