Commentary

Ronald Jordan
Traders Magazine Online News

Understanding Your Data is No Longer Optional

In this contributed article from Global Markets Advisory Group, the advisory discusses the importance of data and how organizations should augment existing skill sets and capabilities to add a data-focused perspective to their operating fabric.

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Do you expect SEC Chairman Jay Clayton to push for regulation in the cryptocurrency issuance and trading markets?

Yes

74%

No

5%

The CFTC will push for regulation

21%

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May 31, 2004

The Value of Floor Broker Executions

By Staff Reports

Electronic executions are credited with reducing transaction costs on U.S. equity markets. Now there is evidence that manual style-order handling may in some cases be better for investors. That's the conclusion of an academic study, which compares non-block trades handled by floor brokers on the American Stock Exchange, with its automated post execution reporting system (PER).

The authors are Puneet Handa, University of Iowa; Robert Schwartz, Baruch College, CUNY, and Ashish Tiwari, University of Iowa.

The study notes that, "trades handled by floor brokers have a significantly smaller realized half-spread than do PER trades (-3.06bps vs. 4.43 bps). This difference of 7.49 bps [basis points] is equivalent to a savings of 3.94 cents per share for an average priced stock on the Amex." The study contends that, based on the sample's floor trading volume, the monthly savings came to $4.36 million.