May 01, 2025

Dr. Janhavi Shankar Tripathi, assistant professor of Finance, has published a new paper titled “FinTech, Fractional Trading, and Order Book Dynamics: A Study of US Equities Markets” (with Dr. Erick W. Rengifo, Fordham University) in FinTech.

The study explores how the rise of commission-free trading platforms and fractional trading has transformed market dynamics in the NASDAQ equity market. By analyzing high-frequency trading data for major stocks like AAPL, AMZN, GOOG, and TSLA, the authors find that FinTech and fractional trading have led to higher price levels, wider tick sizes, and increased volatility.

These shifts suggest deeper retail investor involvement, contributing to noisier price discovery and less liquid, more fragile order books.

The paper raises important concerns about the resilience and efficiency of equity markets in an era of democratized trading and offers valuable insights for regulators and exchanges. For more details: https://www.mdpi.com/2674-1032/4/2/16.