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2006•International Journal of Electronic FinanceRequires access

A critical review to analyse the effect of online and traditional trading on effective market performance on the Nasdaq

Haroun Alryalat, Yogesh Kumar Dwivedi, Jasna Kuljis, Ray J. Paul

Open publisher page 6 citations

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.

About this research paper

What this paper is about

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.

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OpenAlex reports 6 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available 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.

Key concepts: Business, Algorithmic trading, High-frequency trading, Market microstructure, Financial economics, Industrial organization, Economics, Finance

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