Change search
ReferencesLink to record
Permanent link

Direct link
Competition in the exchange industry: An event study of the Nordic equity trading market
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.).
2013 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

This paper explores how the five largest trading venues in the Nordic region compete after theimplementation of MiFID in November 2007. I investigate: (1) if NASDAQ OMX’s market sharehas increased post the introduction of major changes to its market structure, and (2) how anexchange operator can attract equity share order flow in the near future. By applying event studiesto NASDAQ OMX’s market share over time, I find that introducing a faster trading system andadmitting a high frequency trading firm as a member both have a negative impact on NASDAQOMX’s market share. The reductions in market share can be explained by high frequency tradingfirms’ trading behaviour. Introducing central counterparty clearing has a positive effect onNASDAQ OMX’s market share, which highlights market participants’ appreciation of a securetrading environment, and confirms that it is not only posting the best bid and ask quotes thatattracts order flow to an exchange. It can be concluded that NASDAQ OMX in the future needs toaddress an important trade-off between total turnover and market share, as the two are not alwayspositively correlated.

Place, publisher, year, edition, pages
2013. , 40 p.
Examensarbete INDEK, 2013:04
Keyword [en]
MiFID, Equity trading, Competition, Event study, NASDAQ OMX
National Category
Business Administration Mathematical Analysis
URN: urn:nbn:se:kth:diva-133302OAI: diva2:660390
Subject / course
Educational program
Master of Science in Engineering - Industrial Engineering and Management
2013-01-11, Sing-Sing, Lindstedtsvägen 30, Stockholm, 12:00 (English)
Available from: 2013-11-07 Created: 2013-10-29 Last updated: 2013-11-07Bibliographically approved

Open Access in DiVA

Competition in the exchange industry(2033 kB)250 downloads
File information
File name FULLTEXT01.pdfFile size 2033 kBChecksum SHA-512
Type fulltextMimetype application/pdf

By organisation
Industrial Economics and Management (Dept.)
Business AdministrationMathematical Analysis

Search outside of DiVA

GoogleGoogle Scholar
Total: 250 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Total: 228 hits
ReferencesLink to record
Permanent link

Direct link