Stock Market Policy Since the 1987 Crash: A Special Issue of by Hans R. Stoll (auth.), Hans R. Stoll (eds.)

By Hans R. Stoll (auth.), Hans R. Stoll (eds.)

Since the united states inventory marketplace crashed on October 19, 1987, many reports were carried out to profit from this adventure within the hopes of warding off a equally antagonistic destiny fall. The e-book, initially released as a different factor of the Journal of economic ServicesResearch, considers a few of the very important coverage changes which were carried out within the wake of the 1987 crash. Taken individually and jointly, those 5 papers provide a synthesis and precis of crucial coverage suggestions that experience developed because the biggest single-day decline in inventory industry history.

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Extra info for Stock Market Policy Since the 1987 Crash: A Special Issue of the Journal of Financial Services Research

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Average inside and average dealer spreads The pattern of intraday average inside spreads for the sample of 36 NASDAQ stocks for November 15 and 18, 1991, is provided in figure 3. The series is computed by averaging the inside spread for the 36 stocks at the end of each one-minute interval. In interpreting the results, recall that the periods of market stress on November 15 is concentrated between 11:30 AM and 12:30 PM, 1:30 PM and 2:30 PM, and most notably between 3:00 PM and the close of trading.

Identity and summary statistics for the 36 NASDAQ firms in the November 15, 1991 sample Ticker symbol AAPL ALDC ALFA ALGR ALTA ANDW APOG BIGB BMET BRAN CDMS CHRS DHTK ELPA ELRC ERTS FSCO GARN wrs MCIC MNPI MOLX MTWN NELL NLCO RESC RIGS ROAD SMCR SONO SPCO SSAX SWIS TRUK WTHG YELL Firm Mean inside bid price Mean inside spread Mean number of dealers at the inside Apple Computer Aldus Corp. Alfa Corp. Allied Group Alta Gold Andrew Corp. Apogee Enterprises BigB Corp. Biomet Brand Companies Cadmus Charming Shoppes DH Technology EI Paso Electric Electro Rent Electronic Arts First Security Corp.

VI-51), It has been widely reported that during the market break, many market makers fulfilled only their minimum obligation, refusing to buy or sell any more than 100 shares at their quotes, while other firms which would normally trade thousands of shares with their better institutional customers at their quotes were only willing to trade hundreds of shares. Thus, the market break witnessed a dramatic decline in the average trade size. This practice aggravated the already overloaded phone networks, since trades that normally would be executed in one transaction were divided among a number of dealers, each requiring a phone contact.

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