Electronic Call Market Trading

JOURNAL OF PORTFOLIO MANAGEMENT Vol 21, No 3, Spring 1995

NYU Stern School of Business EC-93-19

10 Pages Posted: 25 Aug 1998

See all articles by Nicholas Economides

Nicholas Economides

New York University - Leonard N. Stern School of Business - Department of Economics

Robert A. Schwartz

Baruch College - CUNY

Abstract

Despite its power as a transactions network, scant attention has been given to incorporating an electronic call into a major market center such as the NYSE or Nasdaq. An electronic call clears the markets for all assets at predetermined points in time. By bunching many transactions together, a call market increases liquidity, thereby decreasing transaction costs for public participants. After describing alternative call market structures and their attributes, we propose that an open book electronic call be held three times during the trading day: at the open, at 12:00 noon, and at the close. We discuss the impact of this innovation on an array of issues, including order flow and handling, information revelation, and market transparency. We also discuss the proposed changes from the perspectives of investors, listed companies, exchanges, brokers, and regulators.

JEL Classification: G1, D0

Suggested Citation

Economides, Nicholas and Schwartz, Robert A., Electronic Call Market Trading. JOURNAL OF PORTFOLIO MANAGEMENT Vol 21, No 3, Spring 1995; NYU Stern School of Business EC-93-19 . Available at SSRN: https://ssrn.com/abstract=6525

Nicholas Economides (Contact Author)

New York University - Leonard N. Stern School of Business - Department of Economics ( email )

44 West 4th Street
New York, NY 10012
United States
212-998-0864 (Phone)
212-995-4218 (Fax)

HOME PAGE: http://www.stern.nyu.edu/networks/

Robert A. Schwartz

Baruch College - CUNY ( email )

Zicklin School of Business
17 Lexington Avenue
New York, NY 10010
United States
646-312-3467 (Phone)
646-312-3530 (Fax)

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