Skip to main content
SpringerLink
Log in

The 1997 NASDAQ trading rules

  • Reference work entry
Encyclopedia of Finance

  • 6314 Accesses

Abstract

Several important trading rules were introduced in NASDAQ in 1997. The trading reforms have significantly reduced bid-ask spreads on NASDAQ. This decrease is due to a decrease in market-making costs and/or an increase in market competition for order flows. In addition, in the post-reform period, the spread difference between NASDAQ and the NYSE becomes insignificant with the effect of informed trading costs controlled.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 329.00
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  1. Barclay, M.J., Christie W.G., Harris J.H., Kandel E., and Schultz P.H. (1999). “Effects of market reform on the trading costs and depths of NASDAQ stocks.” Journal of Finance, 54: 1–34.

    Article  Google Scholar 

  2. Bessembinder, H. (1999). “Trade execution costs on NASDAQ and the NYSE: A post-reform comparison.” Journal of Financial and Quantitative Analysis, 34: 387–407.

    Article  Google Scholar 

  3. Bessembinder, H. and Kaufman H. (1997). “A comparison of trade execution costs for NYSE and NASDAQ-listed stocks.” Journal of Financial and Quantitative Analysis, 32: 287–310.

    Article  Google Scholar 

  4. Christie, W.G. and Schultz, P.H. (1994). “Why do NASDAQ market makers avoid odd-eighth quotes?” Journal of Finance, 49: 1813–1840.

    Article  Google Scholar 

  5. He, Y. and Wu, C. (2003a). “The post-reform bid-ask spread disparity between NASDAQ and the NYSE.” Journal of Financial Research, 26: 207–224.

    Article  Google Scholar 

  6. He, Y. and Wu, C. (2003b). “What explains the bid-ask spread decline after NASDAQ reforms?” Financial Markets, Institutions & Instruments, 12: 347–376.

    Article  Google Scholar 

  7. Huang, R.D. and Stoll, H.R. (1996). “Dealer versus auction markets: a paired comparison of execution costs on NASDAQ and the NYSE.” Journal of Financial Economics, 41: 313–357.

    Article  Google Scholar 

  8. Weston, J. (2000). “Competition on the NASDAQ and the impact of recent market reforms.” Journal of Finance, 55: 2565–2598.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Indiana University Southeast, New Albany, USA

    Yan He

Authors
  1. Yan He
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. Rutgers University, New Brunswick/Piscataway, USA

    Cheng-Few Lee

  2. San Francisco State University, San Francisco, USA

    Alice C. Lee

Rights and permissions

Reprints and permissions

Copyright information

© 2006 Springer Science+Business Media, Inc.

About this entry

Cite this entry

He, Y. (2006). The 1997 NASDAQ trading rules. In: Lee, CF., Lee, A.C. (eds) Encyclopedia of Finance. Springer, Boston, MA. https://doi.org/10.1007/978-0-387-26336-6_43

Download citation

  • DOI: https://doi.org/10.1007/978-0-387-26336-6_43

  • Publisher Name: Springer, Boston, MA

  • Print ISBN: 978-0-387-26284-0

  • Online ISBN: 978-0-387-26336-6

  • eBook Packages: Business and Economics

Publish with us

Policies and ethics

Search

Navigation