The Effect of Crossing‐Network Trading on Dealer Market's Bid‐Ask Spreads

Carole Gresse

60 citations0/0 files storedEuropean Financial Management

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Financial Markets and Investment Strategies Corporate Finance and Governance Finance, Markets, and Regulation

Abstract

Abstract This article provides new insights into market competition between traditional exchanges and alternative trading systems in Europe. It investigates the relationship between the trading activity of a crossing network (CN) and the liquidity of a traditional dealer market (DM) by comparing data from the SEAQ quote‐driven segment of the London Stock Exchange (LSE) and internal data from the POSIT crossing network. A cross‐sectional analysis of bid‐ask spreads shows that DM spreads are negatively related to CN executions. Risk‐sharing benefits from CN trading dominate fragmentation and cream‐skimming costs. Further, risk‐sharing gains are found to be related to dealer trading in the CN.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 60 citations exist upstream.

References

1996Dealer versus auction markets: A paired comparison of execution costs on NASDAQ and the NYSE 2000Presidential Address: Friction 1996The Upstairs Market for Large-Block Transactions: Analysis and Measurement of Price Effects 1991Multimarket Trading and Market Liquidity 1996Cream-Skimming or Profit-Sharing? The Curious Role of Purchased Order Flow 1997In Search of Liquidity: Block Trades in the Upstairs and Downstairs Markets 2002The Quality of ECN and Nasdaq Market Maker Quotes 2003Competition among Trading Venues: Information and Trading on Electronic Communications Networks

Cited by

2009Determinants of Volume in Dark Pool Crossing Networks 2016COMPETITION BETWEEN EQUITY MARKETS: A REVIEW OF THE CONSOLIDATION VERSUS FRAGMENTATION DEBATE 2006Catching up with Technology — The Impact of Regulatory Changes on ECNs/MTFs and the Trading Venue Landscape in Europe 2012Price Manipulation, Price Discovery and Transaction Costs in the Crossing Network 2008Shedding Light on Dark Liquidity Pools

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.