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Electronic Call Market Trading

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Author Info
Nicholas Economides () (New York University, NY 10012-1126., Stern School of Business)
Robert Schwartz,

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Abstract

Despite its power as a transactions network, scant attention has been given to incorporating an electronic call into a major market center such as the NYSE or Nasdaq. An electronic call clears the markets for all assets at predetermined points in time. By bunching many transactions together, a call market increases liquidity, thereby decreasing transaction costs for public participants. After describing alternative call market structures and their attributes, we propose that an open book electronic call be held three times during the trading day: at the open, at 12:00 noon, and at the close. We discuss the impact of this innovation on an array of issues, including order flow and handling, information revelation, and market transparency. We also discuss the proposed changes from the perspectives of investors, listed companies, exchanges, brokers, and regulators.

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Paper provided by Economics of Networks in its series Financial Networks with number _001.

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Handle: RePEc:wop:ennefn:_001

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References listed on IDEAS
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.:
  1. Joseph Farrell & Garth Saloner, 1985. "Standardization, Compatibility, and Innovation," RAND Journal of Economics, The RAND Corporation, vol. 16(1), pages 70-83, Spring. [Downloadable!] (restricted)
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  2. Jeffrey Rohlfs, 1974. "A Theory of Interdependent Demand for a Communications Service," Bell Journal of Economics, The RAND Corporation, vol. 5(1), pages 16-37, Spring. [Downloadable!] (restricted)
  3. Nicholas Economides & Robert A. Schwartz, . "Making the Trade: Equity Trading Practices and Market Structure - 1994," Financial Networks _003, Economics of Networks. [Downloadable!]
  4. Economides, Nicholas, 1989. "Desirability of Compatibility in the Absence of Network Externalities," American Economic Review, American Economic Association, vol. 79(5), pages 1165-81, December. [Downloadable!] (restricted)
  5. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June. [Downloadable!] (restricted)
  6. Economides, Nicholas & White, Lawrence J., 1994. "Networks and compatibility: Implications for antitrust," European Economic Review, Elsevier, vol. 38(3-4), pages 651-662, April. [Downloadable!] (restricted)
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(explanations, 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.)

  1. Giovanni Cespa, 2001. "A Comparison of Stock Market Mechanisms," Economics Working Papers 545, Department of Economics and Business, Universitat Pompeu Fabra, revised Nov 2003. [Downloadable!]
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  2. Shah, Ajay & Fernandes, Kshama, 2000. "The relevance of index funds for pension investment in equities," Policy Research Working Paper Series 2494, The World Bank. [Downloadable!]
  3. Iftekhar Hasan & Heiko Schmiedel, 2004. "Do networks in the stock exchange industry pay off? European evidence," International Finance 0405002, EconWPA. [Downloadable!]
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  4. Nicholas Economides, 1994. "How to Enhance Market Liquidity," Working Papers 94-03, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
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  5. Nicholas Economides & Robert A. Schwartz,, . "Equity Trading Practices and Market Structure: Assessing Asset Managers' Demand for Immediacy," Financial Networks 9508, Economics of Networks. [Downloadable!]
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  6. Bruce Mizrach & Christopher J. Neely, 2006. "The transition to electronic communications networks in the secondary treasury market," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 527-542. [Downloadable!]
  7. Nicholas Economides, 2003. "A Parimutuel Market Microstructure for Contingent Claims," Working Papers 03-18, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
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  8. Silvio John Camilleri & Christopher J. Green, 2005. "The Impact of the Suspension of Opening and Closing Call," Finance 0506006, EconWPA. [Downloadable!]
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  9. Jeffrey Lange & Nicholas Economides, 2001. "A Parimutuel Market Microstructure for Contingent Claims Trading," Working Papers 01-13, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
  10. Nicholas Economides, 2006. "Public Policy in Network Industries," Working Papers 06-17, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
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  11. Nicholas Economides & Jeff Heisler, . "Equilibrium Fee Schedules in a Monopolist Call Market," Financial Networks 94-15, Stern School of Bu, Economics of Networks. [Downloadable!]
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  12. Jens Tapking & Jing Yang, . "Horizontal and vertical integration in securities trading and settlement," Bank of England working papers 245, Bank of England. [Downloadable!]
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  13. Nicholas Economides, . "Network Economics with Application to Finance," Financial Networks _004, Economics of Networks. [Downloadable!]
  14. Nicholas Economides, 1995. "The Economics of Networks," Working Papers 94-24, New York University, Leonard N. Stern School of Business, Department of Economics, revised Sep 1995. [Downloadable!]
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