Review of Quantitative Finance and Accounting

, Volume 34, Issue 2, pp 179–197

With or without you: market quality of floor trading when screen trading closes early

Original Research

DOI: 10.1007/s11156-010-0164-5

Cite this article as:
Schiereck, D. & Voigt, C. Rev Quant Finan Acc (2010) 34: 179. doi:10.1007/s11156-010-0164-5


Most stock markets are characterized by a number of parallel operating trading systems which interact intensively with each other. Usually, smaller trading platforms take the leading domestic main market as a benchmark in the price discovery process and for closing open trading positions. But what happens if the smaller trading systems suddenly have to act without this benchmark platform? We examine the effects of the reduction of the daily business hours of a screen based main trading system while a parallel floor based trading system keeps on operating. We provide evidence that liquidity improves while informed trading and informational efficiency of prices decrease at the floor based trading system as a result of the no longer operating main market. While prior research on parallel trading focuses on changes due to a growing number of trading venues, we present the first evidence on market effects when the main trading platform reduces trading hours.


Parallel trading Liquidity Information based trading Market efficiency 

JEL Classification


Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.Endowed Chair for Banking and Finance, European Business School (EBS)International UniversityOestrich-WinkelGermany
  2. 2.Xetra Market DevelopmentDeutsche Börse AGLondonUnited Kingdom

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