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Robert Schwartz graduated New York University in 1959 with a degree in English Literature & Writing – but he has built a long and successful career as a market structure guru, bridging academia and the capital markets industry.
The Baruch College Professor of Finance has published over 70 journal articles and authored nine books; served as a consultant to various market centers including the New York Stock Exchange, Nasdaq, Instinet, the London Stock Exchange, and Deutsche Börse; and in 2009, he was named the first recipient of the World Federation of Exchanges’ annual Award for Excellence.
Traders Magazine was happy to catch up with Schwartz on the eve of his annual event, the Baruch College Trading, Liquidity, and Market Structure Conference.
What was happening at the time the conference was created that made launching it important, and what specific needs did it aim to address?
We’re going back a long way. I ran a bunch of industry conferences while I was at NYU, and those experiences really showed me the value of connecting with industry professionals. One of the early conference series that I organized with two other people was the Global Equity Market Seminar (GEMS) which we held 21 times. The timing couldn’t have been better as European exchanges were transitioning from old, non-electronic systems to modernized, electronic ones, and the industry needed a forum to talk about building that new system. It wasn’t that we were so clever with timing; we were just lucky. My work in market microstructure, which wasn’t even recognized as a field back then, positioned me to help bridge the gap between academia and industry.
How has conference evolved? Are there any topics that have become more prominent, reflecting industry or regulatory changes?
The Trading, Liquidity, and Market Structure Conference has definitely evolved. Initially, it was geared more toward academics, but over time, more and more people from industry wanted to join. I’d say that a couple of years ago, we realized it was great to have a balance between academia and industry. Now, the themes that have become prominent include things like price discovery, short period volatility, and trading costs, as well as the complexities of liquidity provision. As regulation and markets have changed, these topics have really come to the forefront. This conference has become one of the few spaces where academic models and real-world insights can come together and inform each other.
As the conference seeks to bridge the gap between industry and academia, what do you see as the most significant barriers to aligning these perspectives on trading?
One of the biggest difficulties is getting academia to move beyond certain theoretical models that don’t fully capture real-world dynamics. There’s still a reliance on the idea of homogeneous expectations—that investors share similar views on prices. So much of academic microstructure assumes this, but in reality, we deal with divergent expectations. I feel a bit like a rebel here. At the conference, I hope to encourage academics to look beyond traditional models by interacting directly with industry professionals, who bring practical insights into the complexities of trading in a divergent expectations world.
In industry, trading is viewed as a profession, while academia places less emphasis on it. What strategies encourage academic institutions to view trading as a profession?
It’s very hard to shift what professors have been teaching for decades. I know firsthand, I’ve been at this for 50 years. I’ve found that experiential learning is key, and TraderEx is a major part of that. TraderEx, an interactive simulation model I co-developed with Bruce Weber, lets students enter orders in a simulated market environment. I often say it’s like driving a car instead of sitting in the passenger seat. They start to understand that trading isn’t simple, it’s complex, dynamic, and very real. This approach helps students recognize that trading is a professional activity.
What skills does TraderEx help develop for roles in trading, portfolio management, and understanding market structure? How does it translate theoretical knowledge into practical skills?
TraderEx is absolutely vital, it creates dynamic order flows that reflect real-world market behavior. Our goal with the simulation is to let people understand the difficulty, the challenge of trading. You can’t train someone to be a trader in a day, but TraderEx gives them a feel for it. By simulating order-driven markets, it helps them experience price change dynamics, liquidity issues, and trading strategies firsthand. This way, they can bridge theoretical knowledge with practical understandings they’ll need in the real world.
What have been some highlights of your career?
I’ve had quite a few. I’m most proud of is my work at Baruch College, especially establishing the Robert A. Schwartz Center for Trading and Financial Markets Research. If I can get the realization that I’ve had an impact on how investing is taught, especially in bridging academia and industry, that’s what I hope will be my legacy. That’s what I find exciting.
What do you like most about the industry?
What I love most are the people I’ve met. I’ve been so fortunate to meet and work with professionals who are deeply passionate about advancing knowledge in the field. Through my work with various exchanges, from the NYSE to Nasdaq to Deutsche Boerse and beyond, I’ve met wonderful people who are truly interested in understanding the big questions, like how we can improve market structure. Those relationships have been invaluable and make the work all the more meaningful.
Any plans for the future?
I’m as committed as ever to this work. I’m currently pursuing research in areas like high price volatility and the challenge of discovering prices in a divergent expectations world with several papers in progress. I also plan to reach a broader audience through podcasts on these topics, collaborating with people who are as passionate about them as I am. As long as I’m contributing and learning, I see no reason to stop.
