• Corporate Bond Trading on a Limit Order Book Exchange*

    2 monthes ago - By Oxford Journals

    AbstractWe investigate the trading of corporate bonds by an open limit order book mechanism. To do so, we use the case of the Tel Aviv Stock Exchange as a laboratory, in which both stocks and c-bonds are traded by an LOB mechanism. Contrary to the OTC market in the USA, the TASE c-bond market is liquid with narrow spreads and low price dispersion. The short-term traders , who are the analog of the market makers in the LOB, have small trading rents and unconcentrated activity. In the cross-section of bonds, the low concentration is related to low spreads, low price dispersion, and small STT...
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