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Network properties of trading

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Author Info
Ilija I. Zovko

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Abstract

In this paper we examine the connection of microscopic network properties of trading and macroscopic properties of prices. Using intraday trading data from the London Stock Exchange, we are able to track which institutions traded with which and reconstruct the network of exchanged stocks. We call each institution a node in the network and connect the nodes according to whether the two institutions exchanged stocks. We then examine the correlations between the structure of the resulting trading network and properties of prices, such as volatility and absolute price change. The structure of the network is quantified by measures such as asymmetry of buying and selling volume distributions, average number of links per node or the clustering coefficient

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Publisher Info
Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2004 with number 328.

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Date of creation: 11 Aug 2004
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Handle: RePEc:sce:scecf4:328

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Related research
Keywords: market microstructure; limit order markets; networks;

Find related papers by JEL classification:
G1 - Financial Economics - - General Financial Markets

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This page was last updated on 2009-11-27.


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