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Handbook on Information Technology in Finance pp 171–192Cite as

Competition of Retail Trading Venues − Online-brokerage and Security Markets in Germany

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Abstract

German regional stock exchanges rival in the horizontal inter-exchange competition for order flow of investors. Particularly, they are trying to be an attractive option for private retail investors and differentiate against the competition. Differentiation often comes in terms of ‘price quality’ and the attempt to reduce implicit transaction costs for the investors. Therefore, many exchanges have begun to extend their established trading rules. With different labels and – in detail slightly differing – service attributes, e. g. best-execution guarantees have been introduced to most markets. These offerings have in common, that investor gets a guarantee that the price for a transaction will be at least as good as it would be at a predefined – often more liquid – reference market. For retail investors, it is not only the implicit transaction costs but also the explicit ones that are relevant for his orderrouting decision. These are the sum of provisions and fees that are charged by the service providers that participate in routing and matching an order as well as clearing a deal.

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Author information

Authors and Affiliations

  1. Department of Information Systems & Financial Engineering, Competence Center IT & Financial Services, University of Augsburg, 86159, Augsburg, Germany

    Dennis Kundisch

  2. FZI Forschungszentrum Informatik, Research Unit Information Process Engineering (IPE), Haid-und-Neu-Str. 10–14, 76131, Karlsruhe, Germany

    Carsten Holtmann

Authors
  1. Dennis Kundisch
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  2. Carsten Holtmann
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Editor information

Editors and Affiliations

  1. Institute AIFB, University of Karlsruhe (TH), 76128, Karlsruhe, Germany

    Detlef Seese

  2. IISM, University of Karlsruhe (TH), 76218, Karlsruhe, Germany

    Christof Weinhardt

  3. Gillardon AG financial software, Alte Wilhelmstr. 4, 75015, Bretten, Germany

    Frank Schlottmann

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Kundisch, D., Holtmann, C. (2008). Competition of Retail Trading Venues − Online-brokerage and Security Markets in Germany. In: Seese, D., Weinhardt, C., Schlottmann, F. (eds) Handbook on Information Technology in Finance. International Handbooks Information System. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-49487-4_8

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