Czech Experience with Market-Maker Trading System
نویسندگان
چکیده
We study the evolution of trading in a market-maker trading system (SPAD) introduced to the Prague Stock Exchange in 1998. We find that the new system succeeded in increasing the transparency of the market, improved the price discovery function of the exchange, and that investors have benefited from lowered spreads. From this viewpoint, it may be an example for other markets where lack of transparency negatively affects the price discovery function and trading costs. However, we find no evidence that the extent of informed trading decreased over time.
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