Article ID Journal Published Year Pages File Type
961572 Journal of Financial Markets 2013 33 Pages PDF
Abstract
► Euronext allows small-cap firms to hire designated market makers (DMMs). ► DMMs guarantee a minimum liquidity supply for a lump sum annual fee. ► A DMM contract improves liquidity level and reduces liquidity risk. A DMM contract generates an average abnormal return of 3.5%. ► DMMs participate in more trades and incur a trading loss on high quoted-spread days.
Keywords
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
Preview
How do designated market makers create value for small-caps?
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