首页 | 本学科首页   官方微博 | 高级检索  
     检索      


THE RELATIONSHIP BETWEEN OTC BID-ASK SPREADS AND DEALER SIZE: THE IMPACT OF ORDER-PROCESSING AND DIVERSIFICATION COSTS
Authors:Niranjan Tripathy  Richard L Peterson
Abstract:The effects of large transactions on OTC security dealers' bid-ask spreads are analyzed for stocks with different price levels. Because overhead expenses vary little with the value of transactions, economies of scale exist for dealers in higher-priced stocks. Thus, percentage bid-ask spreads decline with the price level of the stock. However, larger transactions entail larger order-clearing and inventory-adjustment costs. These costs may be particularly burdensome for smaller dealers with limited purchasing powers and abilities to diversify inexpensively. Consequently, smaller dealers charge higher spreads for trading high-priced stocks.
Keywords:
设为首页 | 免责声明 | 关于勤云 | 加入收藏

Copyright©北京勤云科技发展有限公司  京ICP备09084417号