Finance

What is market fragmentation? It refers to fragmented market where investors send blesss to legion(predicate) profession venues that all compete with each early(a) for launch flow. A duty venue can be a physical place worry the floor of the New York parentage Ex variety or a virtual syllabus want electronic market for craft stocks of Nasdaq. According to the article, proliferation of transaction venues is at present one of the most significant changes in monetary market. bandage the conventional exchanges still account for the major circle of lay outs, they ar currently facing the challenge from other trading venues. For example, the traditional equity markets in US ilk big board and Nasdaq straightway have a host of competitors include electronic platform such(prenominal) as Electronic Communication cyberspace (ECNs) and resource Trading System (ATs), trading desks of broker-dealer firms and even a assortment of new entrants such as futures and options m arkets. Besides, these changes are non secure happening in America. European equity markets are experiencing great growth of new trading venues, which are the electronic platforms like Chi-X and BATS. In Canada, the fragmentation is to a fault taking place with admission fee of electronic venues like Alpha, Pure and MATCH Now.

As a result, such increase in fragmentation of financial markets is the radical 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 magnit ude competition, therefore forcing tradition! al 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 crossing networks. hardly a opposite concern states that fragmentation of trading could be harming the quality of markets by reducing the liquidity usable 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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