Journal ArticleDOI
Dual Trading: Winners, Losers, and Market Impact
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In this paper, the authors show that dual trading reduces the net order flow and market depth of informed traders, while the utility of uninformed traders increases with dual trading while the net profits decrease.About:
This article is published in Journal of Financial Intermediation.The article was published on 1995-01-01. It has received 43 citations till now. The article focuses on the topics: Alternative trading system & High-frequency trading.read more
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Customer Order Flow, Intermediaries, and Discovery of the Equilibrium Risk-free Rate
TL;DR: In this paper, the authors show that brokerages benefit from privately recognizing informed customer flow, as their own-account trading profitability correlates with customer order access, and the result holds for 30-year treasury futures trading in both electronic and open-outcry markets.
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A model of broker's trading, with applications to order flow internalization $
Sugato Chakravarty,Asani Sarkar +1 more
TL;DR: In this paper, the authors study order flow internalization by broker-dealers, and show that, in the free entry equilibrium, internalization hurts retail customers and market quality.
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An examination of own account trading by dual traders in futures markets
Sugato Chakravarty,Kai Li +1 more
TL;DR: In this article, the authors investigated the timing and determinants of dual traders' personal trades using audit trail transaction data compiled by the Commodity Futures Trading Commission (CFTC) and found that the emergent profile of a dual trader is that of an uninformed trader performing complimentary tasks.
Journal ArticleDOI
Customer Order Flow, Intermediaries, and Discovery of the Equilibrium Risk-Free Rate
TL;DR: In this paper, the authors show that customer flow informativeness is strongest when analyst macro forecasts are most dispersed, and that intermediaries benefit from privately recognizing informed customer flow, as their own-account trading profitability correlates with customer order access.
Journal ArticleDOI
Front-Running by Mutual Fund Managers: A Mixed Bag
TL;DR: In this article, the authors evaluate the welfare implications of front-running by mutual fund managers and find that frontrunning activity not only reduces the liquidity costs of the customers, but also reduces their hedging benefits.
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Posted Content
Did the good guys lose?: heterogeneous traders and regulatory restrictions on dual trading
TL;DR: In this article, the effect of restrictions on dual trading in futures contracts was studied and it was shown that the effect varies among dual traders in the same market and that traders who ceased trading the S&P 500 index futures had the highest personal trading skills prior to restrictions.