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Finance and Credit
 

Innovative solutions to classical problems of trade in the stock market

Vol. 21, Iss. 6, FEBRUARY 2015

PDF  Article PDF Version

Available online: 7 February 2015

Subject Heading: Stock market

JEL Classification: 

Pages: 2-15

Sokolov B.I. Saint Petersburg State University, St. Petersburg, Russian Federation
bisokolov@yandex.ru

Novozhilov Ya.P. Saint Petersburg State University, St. Petersburg, Russian Federation
novozhilov.james@gmail.com

Importance The article offers characteristics of the US stock market's main innovations, and reveals their advantages and disadvantages with respect to traders. The research subject deals with the issue how the innovation facilitates solving the classical problems of stock market trade. We point out that classical problems of traders involve those challenges, which they have been solving since the stock market emergence, i.e. costs minimization, market liquidity and information on trade strategies.
     Objectives The paper identifies the major changes which happened since the beginning of the 21st century in the US stock market, and also provides a comparative analysis in relation to the Russian stock market, and evaluates its prospects.
     Methods The research technique is based on the study of scientific articles and statistical information on a subject of stock trading innovations. On the basis of the data received from open information sources, we have made a general conclusion of data about the technologies applied or to be applied on the Russian stock market. Quantitative and qualitative evaluation of new technologies impact on securities market became the result of research.
     Results An area of application of this research may become extrapolation of the USA experience in the Russian stock market. In particular, in case of change of stock market architecture in the Russian Federation and its further liberalization in the coming years, the American experience can be useful in terms of overcoming difficulties while promoting innovation.
     Conclusions and Relevance We conclude that the new trading technologies in stock market enabled to increase response speed, to narrow spreads and to reduce merchant discount rates.

Keywords: stock market, securities, forward trade, quotations support, dark pools, interest indicators, efficient interest indicators, NASDAQ, POSIT, Liquidnet, algotrading, proprietary trading, collocation

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