Dealers' Incentives to Reveal Their Names

Forthcoming in the Financial Review

40 Pages Posted: 20 Apr 2020

See all articles by Arzé Karam

Arzé Karam

Durham University Business School

Date Written: February 8, 2020

Abstract

This research investigates dealers’ motivation to disclose their names when quoting on the NASDAQ over the years. NASDAQ enables dealers to quote limit orders either anonymously or with a feature that reveals their names. Results are consistent with dealers advertising by revealing their identities so as to develop and maintain their reputation for reliable pricing. Dealers strategically choose to reveal their identities when order flow is profitable. Post-name disclosure analysis further suggests that named quotations are likely to be driven by informational considerations. This research contributes to our understanding of the use of non-anonymity in electronic trading.

Keywords: Name disclosure, dealers’ identity, advertising, reputation

JEL Classification: G10, G20, L10

Suggested Citation

Karam, Arzé, Dealers' Incentives to Reveal Their Names (February 8, 2020). Forthcoming in the Financial Review, Available at SSRN: https://ssrn.com/abstract=3561659

Arzé Karam (Contact Author)

Durham University Business School ( email )

Mill Hill Lane
Durham, DH1 3LB
United Kingdom

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