Why do traders choose to trade anonymously?

Comerton-Forde, C; Putniñš, TJ; Tang, KM

Why do traders choose to trade anonymously?

Comerton-Forde, C Putniñš, TJ

Tang, KM

Permalink

Publication Type:: Journal Article
Citation:: Journal of Financial and Quantitative Analysis, 2011, 46 (4), pp. 1025 - 1049
Issue Date:: 2011-08-01

Closed Access

	Filename	Description	Size
	ContentServer.asp(88).pdf	Published Version	157.63 kB	Adobe PDF	View/Open

Copyright Clearance Process

Recently Added
In Progress
Closed Access

This item is closed access and not available.

Full metadata record

Field	Value	Language
dc.contributor.author	Comerton-Forde, C	en_US
dc.contributor.author	Putniñš, TJ https://orcid.org/0000-0001-5731-499X	en_US
dc.contributor.author	Tang, KM	en_US
dc.date.issued	2011-08-01	en_US
dc.identifier.citation	Journal of Financial and Quantitative Analysis, 2011, 46 (4), pp. 1025 - 1049	en_US
dc.identifier.issn	0022-1090	en_US
dc.identifier.uri	http://hdl.handle.net/10453/123014
dc.description.abstract	This paper examines the use, determinants, and impact of anonymous orders in a market where disclosure of broker identity in the trading screen is voluntary. We find that most trading occurs nonanonymously, contrary to prior literature that suggests liquidity gravitates to anonymous markets. By strategically using anonymity when it is beneficial, traders reduce their execution costs. Traders select anonymity based on various factors including order source, order size and aggressiveness, time of day, liquidity, and expected execution costs. Finally, we report how anonymous orders affect market quality and discuss implications for market design. © Copyright Michael G. Foster School of Business, University of Washington 2011.	en_US
dc.relation.ispartof	Journal of Financial and Quantitative Analysis	en_US
dc.relation.isbasedon	10.1017/S0022109011000214	en_US
dc.subject.classification	Finance	en_US
dc.title	Why do traders choose to trade anonymously?	en_US
dc.type	Journal Article
utslib.citation.volume	4	en_US
utslib.citation.volume	46	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Finance Discipline
utslib.copyright.status	closed_access
pubs.issue	4	en_US
pubs.publication-status	Published	en_US
pubs.volume	46	en_US

Abstract:

This paper examines the use, determinants, and impact of anonymous orders in a market where disclosure of broker identity in the trading screen is voluntary. We find that most trading occurs nonanonymously, contrary to prior literature that suggests liquidity gravitates to anonymous markets. By strategically using anonymity when it is beneficial, traders reduce their execution costs. Traders select anonymity based on various factors including order source, order size and aggressiveness, time of day, liquidity, and expected execution costs. Finally, we report how anonymous orders affect market quality and discuss implications for market design. © Copyright Michael G. Foster School of Business, University of Washington 2011.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/122156