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Registered Trader Participation During The Toronto Stock Exchange's Pre-opening Session

Ryan Davies

No 997, Working Paper from Economics Department, Queen's University

Abstract: This paper documents order submission strategies during the Toronto Stock Exchange's pre-opening session. I find that the registered trader (RT) actively participates in the market opening despite not being able to set the opening price directly and not having an apparent informational advantage. I find that RT opening trades are profitable, are able to moderate overnight price changes, and may be motivated, in part, by inventory adjustment concerns. I focus on interlisted stocks that simultaneously open for trading under two different mechanisms and show how the comparative levels of pre-trade market transparency of each exchange impacts RT profits and participation.

Keywords: Registered trader; market transparency; interlisted securities; price discovery (search for similar items in EconPapers)
JEL-codes: G10 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2000-11
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