Equity Trading Practices and Market Structure: Assessing Asset Managers' Demand for Immediacy
AbstractThis paper summarizes the responses to a questionnaire sent to equity traders through TraderForum of the Institutional Investor. The respondents manage in total a very significant percentage of equity assets under management in the United States. The focus of the questions was the extent of the demand for immediate execution of orders. We found that the majority of traders are willing to trade patiently if this reduces execution costs. Many traders indicate that they frequently delay trades to obtain better prices. Most respondents indicate that they are typically given more than a day to implement a large order, that they typically break up more than 20% of their large orders for execution over time, and that they regularly take more than a day for a large order that has been broken into lots to be executed completely. There is a generally positive view of alternative electronic trading systems, such as Instinet and Investment Technology Group's POSIT. The key motives for trading on these systems are reduced market impact, lower spreads, better liquidity, and anonymity. The respondents indicate that the key changes that would make alternative electronic systems more attractive are an increase in execution rates and more convenient times of trading. The responses to the survey also show that alternative electronic systems would be used more if the traders did not have soft dollar arrangements.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by New York University, Leonard N. Stern School of Business, Department of Economics in its series Working Papers with number 95-08.
Date of creation: 1995
Date of revision:
Contact details of provider:
Postal: New York University, Leonard N. Stern School of Business, Department of Economics, 44 West 4th Street, New York, NY 10012-1126
Phone: (212) 998-0860
Fax: (212) 995-4218
Web page: http://w4.stern.nyu.edu/economics/
More information through EDIRC
Other versions of this item:
- Nicholas Economides & Robert A. Schwartz,, . "Equity Trading Practices and Market Structure: Assessing Asset Managers' Demand for Immediacy," Financial Networks 9508, Economics of Networks.
- G1 - Financial Economics - - General Financial Markets
- D4 - Microeconomics - - Market Structure and Pricing
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nicholas Economides & Robert A. Schwartz, 1993.
"Electronic Call Market Trading,"
93-19, New York University, Leonard N. Stern School of Business, Department of Economics.
- Amihud, Yakov & Mendelson, Haim, 1980. "Dealership market : Market-making with inventory," Journal of Financial Economics, Elsevier, vol. 8(1), pages 31-53, March.
- McInish, Thomas H. & Wood, Robert A., 1990. "An analysis of transactions data for the Toronto Stock Exchange : Return patterns and end-of-the-day effect," Journal of Banking & Finance, Elsevier, vol. 14(2-3), pages 441-458, August.
- Mildenstein, Eckart & Schleef, Harold J, 1983. " The Optimal Pricing Policy of a Monopolistic Marketmaker in the Equity Market," Journal of Finance, American Finance Association, vol. 38(1), pages 218-31, March.
- Nicholas Economides & Robert A. Schwartz, . "Making the Trade: Equity Trading Practices and Market Structure - 1994," Financial Networks _003, Economics of Networks.
- Garman, Mark B., 1976. "Market microstructure," Journal of Financial Economics, Elsevier, vol. 3(3), pages 257-275, June.
- Nicholas Economides, 1995.
"The Economics of Networks,"
94-24, New York University, Leonard N. Stern School of Business, Department of Economics, revised Sep 1995.
- Economides, Nicholas, 1996. "The economics of networks," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 673-699, October.
- Nicholas Economides, 1997. "The Economics of Networks," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 1(0), December.
- Economides, Nicholas, 2003.
"Competition Policy in Network Industries: An Introduction,"
- Nicholas Economides, 2003. "Competition Policy In Network Industries:An Introduction," Working Papers 03-09, New York University, Leonard N. Stern School of Business, Department of Economics.
- Nicholas Economides, 2004. "Competition Policy In Network Industries: An Introduction," Industrial Organization 0407006, EconWPA.
- Nicholas Economides, 2004. "Competition Policy In Network Industries: An Introduction," Working Papers 04-24, NET Institute, revised Jun 2004.
- Hasan, Iftekhar & Schmiedel , Heiko, 2003.
"Do networks in the stock exchange industry pay off? European evidence,"
Research Discussion Papers
2/2003, Bank of Finland.
- Iftekhar Hasan & Heiko Schmiedel, 2004. "Do networks in the stock exchange industry pay off? European evidence," International Finance 0405002, EconWPA.
- THIESSEN, Eric, 2000. "Trader Anonymity, Price Formation and Liquidity," Les Cahiers de Recherche 701, HEC Paris.
- Erik Theissen, 2002. "Trader Anonymity, Price Formation and Liquidity," Bonn Econ Discussion Papers bgse20_2002, University of Bonn, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Viveca Licata).
If references are entirely missing, you can add them using this form.