Research on the Influence of Market Arbitrage Behavior on Market Liquidity

Xinying Han ()
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Xinying Han: Guizhou University of Finance and Economics, Financial Management Major

A chapter in Proceedings of the 2024 4th International Conference on Enterprise Management and Economic Development (ICEMED 2024), 2024, pp 127-133 from Springer

Abstract: Abstract Market arbitrage is a common trading strategy that trades on pricing differences between different markets or assets in order to make a profit. The purpose of this thesis is to study the effect of market arbitrage on market liquidity[1].We adopt the empirical research method, combined with quantitative analysis and case analysis, to analyze the impact of market arbitrage behavior on market liquidity. The results show that market arbitrage has a two-way effect on market liquidity. Moderate market arbitrage is helpful to improve market liquidity, but excessive market arbitrage may lead to abnormal market volatility and affect the stability of market liquidity. The conclusion of this study is of great significance for understanding the market operation mechanism and market risk management. Future studies can further explore the influence of regulatory policies on the relationship between market arbitrage behavior and market liquidity, and find ways to optimize the balance between market arbitrage behavior and market liquidity.

Keywords: market arbitrage behavior; Market liquidity; Trading strategy; Influencing factor (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-506-5_16

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DOI: 10.2991/978-94-6463-506-5_16

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