Execution costs include not only the more explicit trading costs such as commissions and bid-ask spreads
but also the price impact of trades, that is, the unfavorable price moves that may occur after a trader decides to implement a trading strategy.
Analyzing the corn futures contracts traded at B3, we observe a large amplitude in the estimated bid-ask spreads
In addition, with the greater liquidity in the Treasury market, we expect that the bid-ask spreads
on the funds' ETF shares will be considerably lower," said Davis.
After Reg FD was implemented, several empirical studies showed a reduction in bid-ask spreads
Currently the vast majority of CDS trading still takes place over the counter, where price formation lacks transparency and transaction costs are high, partly because investors must pay high bid-ask spreads
Further compounding the problem is the inherently low profitability of the market-making business, given the tight bid-ask spreads
Roll and Subrahmanyam (2010) found that competition among market makers lead to an increasing right-skewed distribution of bid-ask spreads
and such spreads are associated to institutional holdings and the quantity of analysts that follow the company.
In practice of investment management three major sources of transaction costs are taken into account: commissions (and similar payments), bid-ask spreads
and market impact (Elton, Gruber, Brown & Goetzmann, 2010, p.
Studies suggest that markets that switched to an anonymous broker environment have shown reduced bid-ask spreads
Since a good investor protection environment will minimize the costs of information asymmetry, and thereby reduce the probability of trading against informed traders, liquidity providers will incur relatively lower costs and therefore offer narrower bid-ask spreads
have decreased over time and revenues to market-makers have decreased from 1.
Another key issue for the IILM Sukuk, which are expected to have maturities of up to one year, will be their bid-ask spreads
in the secondary market.