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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 2014

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 (6)

The long view

San Francisco Business Times  online


In this article about Eric Ries' plan to take on Wall Street with a new "long term stock exchange," Prof. Terrence Hendershott, the Willis H. Booth Chair in Banking and Finance II, said that investors often support a company's long-term plan if the vision is clear.

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Insiders explain how fractional-share trading went from fringe to must-have — and who's actually doing it in an industry where everyone wants to be an early mover

Business Insider  online


Trading stock slivers is a new trend. Prof. Terrence Hendershott, the Willis H. Booth Chair in Banking and Finance II, says fractional shares forge diversified portfolios, making the risk taken on by brokers rather small. "It's hard to see how this is going to be a big money-maker right from the get-go," he said.

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

The Wall Street Journal  online


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