Stock Liquidity: Market Behavior on Online Trading

Subject Areas : Financial Knowledge of Securities Analysis

Behzad Kardan ¹ , Mahdi Moradi ² , S. Ali Mousavi Gowki ³ , Mahdi Yaghubi ⁴

1 - Assistant Professor, Ferdowsi University of Mashhad, Financial Economics and Administrative College
2 - Professor, Ferdowsi University of Mashhad, Financial Economics and Administrative College
3 - Ph.D Student, Ferdowsi University of Mashhad, Financial Economics and Administrative College,
4 - Ph.D Student, Ferdowsi University of Mashhad, Financial Economics and Administrative College

Received: 2018-04-20 Accepted : 2018-09-09 Published : 2020-03-20

Keywords: online trading, liquidity, abnormal return, Bid-Ask Spread, trading volume,

Abstract :

Online Trading is a great transformation in capital market transactions, along with making access easy and decreasing transactions cost. This research aims to investigate the market behavior about Online Trading, before and after it has been legal. Statistical population includes all firms listed in Tehran Stock Exchange and Iran Fara Bours (OTC) which have at least one trade in each month during March, 2009 and February, 2013. According to the limits, 3792 firm-month observations have been chosen which includes 79 highly traded stock. The results show that Online Trading has a significant positive impact on volume and count of trading stocks, so the stock liquidity increased after online trading has been legal. Although, Online Trading decrease the amount of abnormal return. Also, results show that online trading was effective on significant increasing the Bid-Ask spread.

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