A critical review to analyse the effect of online and traditional trading on effective market performance on the Nasdaq. (17th July 2006)

• Record Type: Journal Article
• Authors: Alryalat, Haroun; Dwivedi, Yogesh Kumar; Kuljis, Jasna; Paul, Ray J.
• Is Part Of: International journal of electronic finance. Volume 1:Number 2(2006)
• Page Start: 151
• Page End: 170
• Publication Date: 2006-07-17
• Subjects: online trading -- traditional trading -- market performance -- Nasdaq -- critical review -- stock exchange -- trading cost -- investor behaviour -- electronic finance -- e-finance -- e-trading -- electronic trading -- trading execution; Financial services industry -- Computer networks -- Periodicals; Electronic commerce -- Periodicals; 332.178
• Languages: English
• ISSNs: 1746-0069

Abstract

The purpose of this paper is to present a critical analysis on the competition between online (ECN) and traditional (Market Maker (MM)) trading on the Nasdaq stock exchange. Online stock trading mechanisms at the exchanges are often a hybrid of dealer and auction markets. Different aspects of trading execution, which is the most commonly used market centre at present, are analysed. This leads to a discussion on: (1) the bath that executes order is organised and (2) its impact on the effective market performance, trading cost and investor behaviour.