Competition among Trading Venues : Information andTrading on Electronic Communications Networks

  title={Competition among Trading Venues : Information andTrading on Electronic Communications Networks},
  author={Michael John Barclay and Terrence Hendershott and D. TIMOTHYMcCORMICK},
This paper explores the competition between two trading venues, Electronic CommunicationNetworks (ECNs) andNasdaqmarket makers. ECNs o¡er the advantages of anonymity and speed of execution, which attract informed traders. Thus, trades are more likely to occur on ECNs when information asymmetry is greater andwhen trading volume and stock-returnvolatilityare high. ECN trades have greater permanent price impacts and more private information is revealed through ECN trades than though market-maker… CONTINUE READING
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