The pandemic of COVID-19 brought many changes for the whole humanity. The financial markets where no exception, but the trading has continued. Nowadays, the order can be placed from anywhere around the world and almost all stock exchanges are electronic and algorithmic. However, there is still one exchange where the floor trading exists – NYSE. During these tough times, NYSE was also purely electronic, the floor trading was closed, and human interaction was not possible. A novel study by Brogaard, Ringgenberg and Roesch examines the role of floor traders in the recent era driven by computers. The conclusion is clear: in the current digital age, floor traders still matter.

Authors: Jonathan Brogaard, Matthew C. Ringgenberg, Dominik Roesch

Title: Does Floor Trading Matter?

Once upon a time, there was everybody’s favourite finance tool in a town – Capital Asset Pricing Model, which was liked and used by nearly everyone. But a few decades ago, it went out of fashion. Easier accessibility of cheap finance databases allowed a lot of researchers to dig deeper into those data. They uncovered a tremendous amount of evidence for a lot of market anomalies not consistent with CAPM. A new research paper written by Park and Wang shows that CAPM is maybe not completely useless. The rise of automated trading causes individual stocks’ returns to align more closely with the market. Intraday correlation in the equity market is rising, and so is the fraction of firms’ returns that are explained by market returns …

Authors: Park, Wang

Title: Did Trading Bots Resurrect the CAPM?