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Related Experiment Video

Updated: Oct 12, 2025

Dynamic Monitoring of Seroconversion using a Multianalyte Immunobead Assay for Covid-19
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COVID-19 and market structure dynamics.

Justin Cox1, Donovan Woods2

  • 1Appalachian State University, Boone, NC 38655, United States.

Journal of Banking & Finance
|November 24, 2021
PubMed
Summary

The COVID-19 pandemic significantly altered U.S. market structure, increasing hidden liquidity while decreasing algorithmic trading and market fragmentation. Remaining algorithmic traders improved overall market quality during this period.

Keywords:
Algorithmic tradingCOVID-19 pandemicHidden liquidityNYSE floor close

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Area of Science:

  • Finance
  • Economics
  • Market Microstructure

Background:

  • The COVID-19 pandemic introduced unprecedented market uncertainty and operational changes, including the suspension of the New York Stock Exchange (NYSE) trading floor.
  • These events prompted significant shifts in financial market dynamics and trading behaviors.

Purpose of the Study:

  • To analyze the impact of COVID-19 market uncertainty and NYSE floor suspension on U.S. market structure.
  • To investigate changes in trading dynamics, including market fragmentation, algorithmic trading, and hidden liquidity.

Main Methods:

  • Empirical analysis of trading data during the COVID-19 period.
  • Comparison of market metrics before, during, and after periods of heightened uncertainty and NYSE floor suspension.

Main Results:

  • A significant increase in hidden liquidity was observed during both heightened market uncertainty and NYSE floor suspension.
  • Algorithmic trading and market fragmentation experienced significant decreases during these periods.
  • Despite reduced participation, the remaining algorithmic traders demonstrated an improvement in market quality.

Conclusions:

  • COVID-19 profoundly impacted U.S. market structure, affecting order routing, pre-trade transparency, and automated trading strategies.
  • The study highlights the resilience and adaptive capacity of market participants, particularly algorithmic traders, in navigating extreme market conditions.