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H. Stoll (1978)
THE SUPPLY OF DEALER SERVICES IN SECURITIES MARKETSJournal of Finance, 33
H. Demsetz (1968)
The Cost of TransactingQuarterly Journal of Economics, 82
S. Tiniç (1972)
The Economics of Liquidity ServicesQuarterly Journal of Economics, 86
W. Bagehot (1971)
The Only Game in TownFinancial Analysts Journal, 27
J. Gould, D. Galai (1974)
Transactions costs and the relationship between put and call pricesJournal of Financial Economics, 1
Harold Harold (February 1968)
“The Cost of Transacting”Quarterly Journal of Economics, LXXXII
S. Tiniç, R. West (1972)
Competition and the Pricing of Dealer Service in the Over-the-Counter Stock MarketJournal of Financial and Quantitative Analysis, 7
G. Benston, R. Hagerman (1974)
Determinants of bid-asked spreads in the over-the-counter marketJournal of Financial Economics, 1
Anthony Santomero (1974)
The Economic Effects of NASDAQ: Some Preliminary ResultsJournal of Financial and Quantitative Analysis, 9
M. Blume, Frank Husic (1973)
Price, Beta, and Exchange ListingJournal of Finance, 28
L. Jack, Town Financial (1971)
BAGEHOT, Walter (pseudonym for TREYNOR), . The Only Game In Journal, , ., 27
M. Jensen, F. Black, Myron Scholes (2006)
The Capital Asset Pricing Model: Some Empirical TestsCapital Markets: Asset Pricing & Valuation
H. Stoll (1976)
Dealer Inventory Behavior: An Empirical Investigation of NASDAQ StocksJournal of Financial and Quantitative Analysis, 11
I. Friend, M. Blume (1970)
Measurement of Portfolio Performance Under UncertaintyThe American Economic Review, 60
J. Jaffe, R. Winkler (1976)
OPTIMAL SPECULATION AGAINST AN EFFICIENT MARKETJournal of Finance, 31
INTRODUCTION AN IMPORTANT, if not critical, element in almost every financial market is the dealer who stands ready to trade for his own account and thereby provides to the public the convenience of being able to trade immediately. The dealer incurs costs of holding an inventory of securities, certain costs of handling each order and costs due to adverse information possessed by those that trade with him. He is compensated for the costs by selling at the ask price (above the "true" price) and buying at the bid price (below the "true" price).I Dealers are to be distinguished from brokers who do not bear risk and who usually charge a commission. Since healthy financial markets are viewed as critical to a healthy economy and since dealers stand at the center of many financial markets, dealers have been the focus of many regulatory inquiries and some empirical studies by academicians. Today, competitive forces (instiutional trading, third market, block trading), Justice Department pressures, and technological change (the computer) are in the process of producing major changes in the structure of securities markets. As part of this restructuring a major issue is the way in which the dealer function should be
The Journal of Finance – Wiley
Published: Sep 1, 1978
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