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The microgeographies of global finance: High-frequency trading and the construction of information inequality

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  • Matthew Zook
  • Michael H Grote

Abstract

Automated high-frequency trading has grown tremendously in the past 20 years and is responsible for about half of all trading activities at stock exchanges worldwide. Geography is central to the rise of high-frequency trading due to a market design of “continuous trading†that allows traders to engage in arbitrage based upon informational advantages built into the socio-technical assemblages that make up current capital markets. Enormous investments have been made in creating transmission technologies and optimizing computer architectures, all in an effort to shave milliseconds of order travel time (or latency) within and between markets. We show that as a result of the built spatial configuration of capital markets, “public†is no longer synonymous with “equal†information. High-frequency trading increases information inequalities between market participants.

Suggested Citation

  • Matthew Zook & Michael H Grote, 2017. "The microgeographies of global finance: High-frequency trading and the construction of information inequality," Environment and Planning A, , vol. 49(1), pages 121-140, January.
    • Handle: RePEc:sae:envira:v:49:y:2017:i:1:p:121-140
    DOI: 10.1177/0308518X16667298
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    Cited by:

    1. Kate Gasparro & Ashby Monk, 2020. "Demystifying “localness†of infrastructure assets: Crowdfunders as local intermediaries for global investors," Environment and Planning A, , vol. 52(5), pages 878-897, August.
    2. Matthew Zook & Michael H. Grote, 2020. "Initial coin offerings: Linking technology and financialization," Environment and Planning A, , vol. 52(8), pages 1560-1582, November.
    3. Jonathan Beaverstock & Adam Leaver & Daniel Tischer, 2023. "How financial products organize spatial networks: Analyzing collateralized debt obligations and collateralized loan obligations as “networked productsâ€," Environment and Planning A, , vol. 55(4), pages 969-996, June.
    4. Toby Miller, 2020. "Inviting Critical Political Economy to the Table," Climatic Change, Springer, vol. 163(1), pages 155-160, November.

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