Finance

What is market fragmentation? It refers to fragmented market where investors send blesss to numerous profession venues that all compete with each former(a) for night club flow. A commerce venue can be a physical place worry the floor of the New York rootage Ex diversity or a virtual syllabus homogeneous electronic market for craft stocks of Nasdaq. According to the article, proliferation of craft venues is at present one of the most significant changes in monetary market. bandage the conventional exchanges still account for the major dower of baseball clubs, they ar currently facing the challenge from other trading venues. For example, the traditional equity markets in US same big board and Nasdaq straightway have a host of competitors include electronic platform such as Electronic Communication communicate (ECNs) and resource Trading System (ATs), trading desks of broker-dealer firms and even a assortment of new entrants such as futures and options market s. Besides, these changes are non unspoilt happening in America. European equity markets are experiencing dramatic growth of new trading venues, which are the electronic platforms like Chi-X and BATS. In Canada, the fragmentation is in addition taking place with doorway of electronic venues like Alpha, Pure and MATCH Now.

As a result, such increase in fragmentation of financial markets is the melodic theme 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 magn itude competition, therefore forcing traditi! onal 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 track 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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