JERSEY CITY, N.J., June 27, 2013 /PRNewswire/ -- Knight
Capital Group, Inc. (NYSE Euronext: KCG) today announced the
release of "Equity Trading in the 21st Century: An Update." This
study updates the empirical results of a previous report from 2010
by incorporating the most recent data and accounting for current
market dynamics. The findings of the study underscore the continued
health of the U.S. equity markets and provide a basis for the
timely analysis of the current market structure.
The updated study, commissioned by Knight Capital Group and
authored by professors James Angel
of Georgetown University, Larry Harris of the University of Southern California, and Chester Spatt of Carnegie
Mellon University, concludes:
- U.S. markets continue to be healthy with low transaction costs,
ample market depth and high execution speeds;
- Gains in market quality documented in 2010 continue and the
markets remain significantly more liquid than they were before the
growth of electronic trading; and
- Improvements in market quality have benefited small traders as
well as institutional traders executing very large orders over many
days.
Among other findings, the study shows that intraday volatility
of individual stocks as measured by the high/low range remains
below the levels of the pre-electronic 1990s. It concludes that
quote to trade ratios have moderated from their peaks in 2011, with
the decrease likely due to a reduction in volatility and a
reduction in the number of high frequency traders making
markets.
While empirical results show that the markets remain healthy,
the study concludes that there is room for further improvement of
market structures to better serve investors. However, the study
warns against certain proposals to reform market structures, citing
as examples proposals that impose transaction costs on trading and
minimum resting times on quotes, which the study concludes would
hurt liquidity without producing the desired improvements in market
quality.
James Angel is an Associate
Professor at the McDonough School of Business at Georgetown University. Larry Harris is a former Chief Economist of the
U.S. Securities and Exchange Commission and is currently a
Professor of Finance and Business Economics at the USC Marshall School of Business, where he holds the
Fred V. Keenan Chair in Finance. Chester
Spatt is a former Chief Economist of the U.S. Securities and
Exchange Commission and is currently a Professor of Finance at the
Tepper School of Business at Carnegie Mellon
University, where he is the Pamela R. and Kenneth B. Dunn
Professor of Finance.
To access the study, go to
http://www.knight.com/newsroom/researchandcommentary.asp.
About Knight
Knight Capital Group (NYSE Euronext: KCG) is a global financial
services firm that provides access to the capital markets across
multiple asset classes to a broad network of clients, including
broker-dealers, institutions and corporations. Knight is
headquartered in Jersey City, N.J.
with a global presence across the Americas, Europe, and the Asia
Pacific regions. For further information about Knight,
please visit www.knight.com.
SOURCE Knight Capital Group, Inc.