Economics, Econometrics and Finance
4 years ago

Closing Main Market Early Boosts Floor Trading Liquidity, Reduces Price Efficiency

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Publications of Darmstadt Technical University, Institute for Business Studies (BWL)
With or Without You: Market Quality of Floor Trading When Screen Trading Closes Early
Dirk Schiereck, Christian C. Voigt

Paper Summary

Stock markets with multiple trading systems interact closely, with smaller platforms often using the main market as a benchmark. When the main market closes early, the smaller floor-based system sees improved liquidity but decreased efficiency in pricing due to less information. This is the first study to show how reducing main market hours affects parallel trading systems.

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