Finance

What is market fragmentation? It refers to fragmented market where investors send blesss to legion(predicate) profession venues that all compete with each separate for purchase club flow. A concern venue can be a physical place worry the floor of the New York parentage Ex modify or a virtual syllabus deal electronic market for trade stocks of Nasdaq. According to the article, proliferation of affair venues is at present one of the most significant changes in fiscal market. bandage the conventional exchanges still account for the major tract of orders, they ar currently facing the challenge from other trading venues. For example, the traditional equity markets in US worry big board and Nasdaq straightway have a host of competitors include electronic platform such(prenominal) as Electronic Communication net (ECNs) and resource Trading System (ATs), trading desks of broker-dealer firms and even a assortment of new entrants such as futures and options markets. Besides, these changes are non salutary happening in America. European equity markets are experiencing spectacular growth of new trading venues, which are the electronic platforms like Chi-X and BATS. In Canada, the fragmentation is likewise taking place with memory access of electronic venues like Alpha, Pure and MATCH Now.

As a result, such increase in fragmentation of financial markets is the idea of the authors to conduct this research. However, it is not quite clear that how fragmentation of trading is affecting the market quality. Certainly, the addition of new trading venues has change magnitude competiti on, therefore forcing traditional exchanges ! to lower trading charges and other fees. Also, the proliferation of venues has provided a wider range of trading options to investors, therefore to foster innovations such as reductions in latency and more sophisticated cover networks. hardly a opposite concern states that fragmentation of trading could be harming the quality of markets by reducing the liquidity operational not only in the individual markets but also in the...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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