Competition to Provide Liquidity on the New York Stock Exchange Harvard Case Solution & Analysis

Produce sales from trading fees and in order to become successful in bringing trading volume, exchanges must let prospective dealers to transact immediately at a price that is known. This is known as providing liquidity.

On-floor traders have conventionally been supposed to have advantages over off-floor traders. If that is true, then this might deter off-floor traders from supplying liquidity and reduce the efficiency of security markets. We discover that on-floor traders do appear to appreciate some advantages in supplying liquidity, although the differences are not great. This implies the New York Stock Exchange is justified in several of its recent initiatives designed to level the playing field between on- and off-floor traders.

PUBLICATION DATE: November 01, 2007 PRODUCT #: BH256-PDF-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

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