Competition and efficiency within the equity markets

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Author

Wagdy Hendy Ibrahim El-Desouky

Patco Cotton Co. Alexandria-EGYPT

Abstract

As from late Eighties of the last century, what’s called technical equity markets exist as spread of internet system in which make it possible that both supply and demand for goods and services are available within 24 hours a day. But so far a little attention has been given to improving the accuracy of price determination resulting from demand for immediacy and for too much importance has been attached to the supply of immediacy ( the ability to trade at any time in the continues market ). Unfortunately, participants pay price to trade whenever they wish during trading section the components include the bid-ask spread, market impact and commissions. In addition the temporal fragmental of orders in one continuous market makes the market more opaque.

Thus for the assumption that participants demand transactional immediacy has gone practically unquestionable would some asset managers choose not paying the price of immediacy of the truly understood the cost of the service and if they had an alternative . Immediacy clearly important to a participant seeking to trade on information that has not yet been reflected in market prices and many participants most notably the mutual funds, do have to trade certain amount each day because of deposits redemptions or their cash flow needs. This does not mean however that they must be able to trade at any given  moment in the day. It  is conceivable  that  the provision  of immediacy because it temporally fragments orders actually makes it more difficult for these participants to “get the job done” at a reasonable cost by the end of the day.

On this presentation concentration will be devoted to the following topics

  • Transparency
  • Price Discovery
  • Taking decisions for immediacy demand
  • Consideration of the order flow
  • Market structure

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