We examine how institutional risk control mechanisms influence proprietary stock trader behavior. When traders are forced to liquidate their inventory at a pre-designated time, they often hold onto their losing trades until the very last moment. We find that the difference between losing and...

We examine the performance of electronic stock traders who are dispersed geographically throughout the United States. When traders located in and outside of the New York City (financial center) area trade the same stock at the same time, financial center traders perform better. Overall, we find...

We examine the performance, behavior, and execution quality of high frequency electronic stock traders who are geographically dispersed throughout the U.S. Traders who are located in the New York City (financial center) area perform better than traders who are located outside of this area....

We examine how institutional risk control mechanisms influence proprietary stock trader behavior. When traders are forced to liquidate their inventory at a pre-designated time, they often hold onto their losing trades until the very last moment. We find that the difference between losing and...

Security firms typically link trader compensation to performance. We examine how this influences traders to allocate their trading activities over time. Traders employed at a U.S. broker-dealer trade more actively on their last day of trading in a monthly evaluation period. Self-employed...

We examine how professional stock traders, working for a Nasdaq market maker, are influenced by their recent trading performance. Our results show that, in aggregate, when the traders incur morning losses, their desire to recoup these losses before the close of trading leads them to trade more...

We examine intraday execution quality patterns on Nasdaq stocks using proprietary order-level data from a U.S. broker dealer. Orders submitted midday execute slower than orders submitted around the open and close. However, midday orders have lower execution costs. Our results indicate that...

We examine determinants of U.S. equity trader maker-taker decisions (e.g., execute a non-marketable limit order or marketable order). Those with a higher maker tendency are slower, larger-size traders who exhibit smaller price impact and concentrate their trading in fewer markets. When the...

We examine whether prior outcomes influence the order selection decisions of proprietary stock traders who trade the capital of a National Securities Dealer. Trader's decision to either take or provide liquidity is correlated with their prior trading performance. When traders experience...

We examine how institutional stock traders alter their trading behavior after a change in the tick size. Larger size orders become more difficult to execute and are less common after the conversion to decimal pricing and a one-cent minimum price increment. These orders take far longer to execute...