• ISSN: 2349-6002
  • UGC Approved Journal No 47859
Author Login IJIRT Partner Network (IPN) Login

The Impact of High-Frequency Trading on Market Liquidity and Price Efficiency in the Indian Stock Market.

  • Unique Paper ID: 161127
  • Volume: 10
  • Issue: 2
  • PageNo: 653-661
  • Abstract:
  • This research study examines the impact of high-frequency trading (HFT) on market liquidity and price efficiency in the Indian stock market, specifically focusing on the Nifty index. By analysing a comprehensive dataset of Nifty companies, one aim to shed light on the implications of HFT for market dynamics in the Indian context. Using regression analysis, one investigate the relationship between HFT participation ratio, trading volume, bid-ask spread, and price efficiency. Our findings reveal that HFT participation has a significant positive association with trading volume, indicating its influence on market activity. Furthermore, one observe a negative relationship between HFT participation and bid-ask spread, suggesting that HFT may contribute to reduced transaction costs and tighter spreads. We also conduct a correlation analysis to assess the interplay among these variables. The correlation matrix highlights the relationships between HFT participation ratio, trading volume, bid-ask spread, and price efficiency. The results indicate that higher trading volume is positively correlated with HFT participation, while bid-ask spread and price efficiency exhibit negative correlations with HFT participation. These findings contribute to the understanding of the impact of HFT on market liquidity and price efficiency in the Indian stock market, specifically within the Nifty index. The insights gained from this research can inform market participants, regulators, and policymakers about the implications of HFT and aid in the development of appropriate measures to maintain a fair and efficient market environment
Download article email to a friend

Cite This Article

  • ISSN: 2349-6002
  • Volume: 10
  • Issue: 2
  • PageNo: 653-661

The Impact of High-Frequency Trading on Market Liquidity and Price Efficiency in the Indian Stock Market.

Related Articles

Impact Factor
8.01 (Year 2024)
UGC Approved
Journal no 47859

Join Our IPN

IJIRT Partner Network

Submit your research paper and those of your network (friends, colleagues, or peers) through your IPN account, and receive 800 INR for each paper that gets published.

Join Now

Latest Publication

Archive

View More

Recent Conferences

NCSEM 2024

National Conference on Sustainable Engineering and Management - 2024 Last Date: 15th March 2024

Submit inquiry