Are Limit Orders Rational?

Je racionální používat limitní objednávky?

Martin Šmíd

Acta Oeconomica Pragensia, 2007, vol. 2007, issue 4, 32-38

Abstract: We examine whether it is rational to put limit orders in a limit order market. We find that limit orders are not needed and may be even disadvantageous given that the agent trades on-line. Further, we present a numerical study indicating that putting limit orders may be optimal given that the agent trades at discrete times but the benefit from using them in comparison with immediate buying and selling is negligible.

Keywords: market microstructure; limit order market; portfolio selection (search for similar items in EconPapers)
JEL-codes: C51 G10 (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://aop.vse.cz/doi/10.18267/j.aop.71.html (text/html)
http://aop.vse.cz/doi/10.18267/j.aop.71.pdf (application/pdf)
free of charge

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:prg:jnlaop:v:2007:y:2007:i:4:id:71:p:32-38

Ordering information: This journal article can be ordered from
Redakce Acta Oeconomica Pragensia, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3
http://aop.vse.cz

DOI: 10.18267/j.aop.71

Access Statistics for this article

Acta Oeconomica Pragensia is currently edited by Klára Šimůnková

More articles in Acta Oeconomica Pragensia from Prague University of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Stanislav Vojir ().