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Terrence Hendershott - Haas School of Business, University of California, Berkeley. Berkeley, CA, US

Terrence Hendershott Terrence Hendershott

Professor | Willis H. Booth Chair in Banking and Finance II | Faculty Director, Master of Financial Engineering Program | Haas School of Business, University of California, Berkeley


Areas of Expertise (8)

Market Microstructure

Electronic Trading

Market Making

Algorithmic Trading

High-frequency Trading

Over-the-counter Markets

Information Technology in Financial Markets

Financial Market Regulation


Terrence "Terry" Hendershott chaired the NASDAQ Economic Advisory Board and served as a visiting economist at the New York Stock Exchange. His work spans a range of financial instruments trading on exchanges and over the counter in the U.S. and internationally. He is an expert on the structure, design, and regulation of financial markets and how market participants—such as market makers, high-frequency traders, and institutional investors—affect price discovery and liquidity. His research also focuses on the competition between electronic and traditional markets and the role of information technology in those markets. His numerous honors include best paper awards from the Review of Financial Studies and the Financial Review and NYSE and NASDAQ best paper awards on equity trading and market microstructure, respectively. He has served as an associate editor for Management Science, the Journal of Financial Markets, and Information Systems Research.

Education (2)

Graduate School of Business, Stanford University: PhD, Operations, Information, and Technology

Miami University: BS, Mathematics and Statistics

Honors & Awards (6)

Michael J. Brennan Best Paper Award

Awarded for best paper published in Review of Financial Studies

Financial Review Outstanding Publication Award


Philip Brown Prize


New York Stock Exchange Euronext Award

Awarded for the best paper on equity trading, Western Finance Association Meetings
2001, 2008

Nasdaq Award for best paper on market microstructure, Financial Management Association


Schwabacher Fellowship Award

2005 – 2006

Positions Held (1)

At Haas since 2001

2020 – Faculty Director, Master of Financial Engineering Program
2017 – present, Willis H. Booth Chair in Banking and Finance, Haas School of Business
2012 – 2017, Cheryl and Christian Valentine Chair, Haas School of Business
2011 - 2012, Barbara and Gerson Bakar Faculty Fellow, Haas School of Business
2005 – 2006, Visiting Economist, New York Stock Exchange
1999 – 2001, Xerox Assistant Professor of Computers & Information Systems, Simon School of Business Administration, University of Rochester

Media Appearances (4)

Fans Flip Out Over NFL’s Rule on Coin Toss and Overtime. Is It Fair?

Wall Street Journal  


Research by Terrence Hendershott, a finance professor at the University of California, Berkeley, made the case that the NFL should auction off possession in overtime games with teams bidding on who gets the ball first using starting position as currency. The team whose bid is farthest from its target end zone wins the auction.

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HFT mixed bag for retail investors say experts

Forbes  online


Mom-and-pop investors are both helped and hurt by high-frequency traders. But Terrence Hendershott cautioned that if the SEC tried to regulate HFTers, they would find loopholes.“If we are going to regulate it, everyone will try to find ways to avoid being labeled as a high-frequency trader,” he said.

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INSIGHTS: Meet The Next Generation of TCA

Traders  online


When properly constructed, market microstructure analytics (MMA) provide an enhanced version of Transaction Cost Analysis (TCA) offering insight into execution quality...

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SEC shouldn't approve IEX until Reg NMS is re-examined

The Hill  online


Is slower better? The debate around IEX's application to become a public exchange seems to have coalesced around this simple question. If you believe automation and high frequency trading (HFT) are bad because they are fast, then it may seem obvious to slow everyone down. IEX designed its proposed exchange to include an intentional 350 microsecond delay for incoming and outgoing information, which sounds sensible enough to the investors feeling outrun.

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Selected Research Grants (3)

The effect of technological and regulatory changes on market structure and transparency across equity and fixed-income markets in the US and Europe

Norwegian Finance Initiative (NFI) 

Feb 2018

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CAREER: Electronic Trading Systems

National Science Foundation Grant 

NSF Grant #0133848

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Entrepreneurship & Innovation Research Grant

Kauffman Foundation 


Selected Papers & Publications (11)

Price Discovery without Trading: Evidence from Limit Orders Journal of Finance

Terrence Hendershott, Jonathan Brogaard, and Ryan Riordan


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Short Selling and Price Discovery in Corporate Bonds Journal of Financial and Quantitative Analysis

Terrence Hendershott, Roman Kozhan, and Vikas Raman


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High Frequency Trading and the 2008 Short Sale Ban Journal of Financial Economics

Terrence Hendershott, Jonathan Brogaard, and Ryan Riordan


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Are Institutions Informed about News? Journal of Financial Economics

Terry Hendershott, Dmitry Livdan, and Norman Schürhoff


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Click or Call? Auction versus Search in the Over-the-Counter Market Journal of Finance

Terry Hendershott and Ananth Madhavan


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Price Pressures Journal of Financial Economics

Terrence Hendershott and Albert J. Menkveld


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High-Frequency Trading and Price Discovery Review of Financial Studies

Terrence Hendershott, Jonathan Brogaard, and Ryan Riordan


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Does Algorithmic Trading Improve Liquidity? Journal of Finance

Terrence Hendershott, Charles Jones, and Albert Menkveld


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Automation Versus Intermediation: Evidence from Treasuries Going Off the Run Journal of Finance

Terrence Hendershott, Michael Barclay, and Kenneth Kotz


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Competition Among Trading Venues: Information and Trading on Electronic Communications Network Journal of Finance

Terrence Hendershott, Michael Barclay, and Tim McCormick


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Crossing Networks and Dealer Markets: Competition and Performance Journal of Finance

Terrence Hendershott and Haim Mendelson


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Teaching (3)

High Frequency Finance


Introduction to Business Analytics


Past Courses:

Analytic Decision Modeling Using Spreadsheets
Information Technology Strategy
Operations Management