We examine the impact of differing levels of pretrade transparency on the quotation behavior of Nasdaq market makers. We find that market makers are more likely to quote on odd ticks, and to actively narrow the spread, when they can do so anonymously by posting limit orders on Electronic...

The New York Stock Exchange repealed its Rule 390 on May 8, 2000. The rule disallowed exchange members from trading stocks listed prior to April 26, 1979 outside of an exchange. We examine in this paper some of the implications of the rule's repeal. In particular, we examine changes in market...

We use the American Stock Exchange?s May 1997 market-wide adoption of $1/16 ticks to examine several hypothesis relating to tick size reduction. Specifically, we consider volatility, other aspects of market quality, trader behavior, and specialist profits. The hypothesis that volatility is...

The primary difference between continuous market mechanisms is in the priority rules that they use to match buyers and sellers. In most markets price takes precedence, but if two or more parties are willing to pay the same price, then various markets use different secondary priority rules to...

We examine the impact of three Nasdaq rule changes on some aspects of market quality. In particular we investigate the quotation behavior of market makers following the reduction in tick size from eighths to sixteenths on June 2, 1997; the direct impact of including electronic communication network...

Equity mutual fund data from 1976-1993 is used to test hypotheses that distinguish window dressing from performance hedging. No significant difference is found pre/post 1983 in the number of funds choosing non-December fiscal year ends or in the percentage of dollars invested when comparing...

This paper uses a new data base to examine the impact of decimalization on market quality, payment for order flow, and member profits. I examine changes in these measures following the adoption of decimalization by the Toronto Stock Exchange. The data base employed lists the identities of each...

Corporate managers often cite improved visibility as a motive for listing. Recent studies suggest that firms list after a period of strong growth, which may also attract increased visibility. This study examines listing as a determinant of firm visibility levels. We compare visibility changes...

We examine NASD compliance with the Securities and Exchange Commission's (SEC) mandate that all trades be reported within 90 seconds of completion and in sequence. We find a substantial number of out-of-sequence trades both on an absolute level and when compared to out-of-sequence reporting on...