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COMPUTERS AND THE STOCK MARKET This research co

This research considers two questions. First, how have computers been and continue to be used in the stock market? Second, how are computers likely to affect the stock market over the next decade?

How Computers Have Been and Continue

Computer technology was introduced into the stock market initially to perform number crunching activities associated primarily with recording and reporting market operations. These initial applications were valuable, and continue to be valuable. The introduction of new technology is one of the means by which productivity may be increased (Wright, 1989). New technology tends to lower production costs and increase profitability over the long-term, and is, thus, indispensable in the context of growth.

The introduction of computer technology into the stock market has enabled brokers and exchanges to utilize available human capital in more productive ways (Vosti, 1989). Computer technology, is, in effect, assisting the stock market to eliminate limits to growth.

The applications of computer technology in the stock market have progressed well beyond number crunching activities. One of the most significant of the current applications is decision-making (Clark, 1989). It is often held that the most productive manager or operator is one who has a minimum number of decisions to make (Gortner, 1986). This assertion does not mean that managers and stock traders should not make decisions. Rather, it means that managers and stock traders should not be burdened with requirements to make routine decisions; that a decision-making system should be established, by which most routine decision-making will not directly involve managers and stock traders (Mercer and Koester, 1985). At issue in the stock market is the definition of a routine decision. The most contentious example of this dilemma is program trading (Clark, 1989). Program trading is based on the use of computerized decision models that ...

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COMPUTERS AND THE STOCK MARKET This research co. (1969, December 31). In LotsofEssays.com. Retrieved 19:40, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1702848.html