This paper analyzes the market entry of Turquoise in September 2008. Turquoise started trading stocks from 14 European countries at (almost) the same time. We find that Turquoise gained higher market shares in larger and less volatile stocks, and in stocks that had excessively high pre-entry spreads. The entry of Turquoise led to a decrease in spreads but not to an increase in trading volume. Turquoise does not generally offer lower execution costs than the primary market. Taken together our results are consistent with the view that the new entrant serves as a disciplinary device that reduces rents earned by the suppliers of liquidity in the primary market. JEL Classification: G10, G12, G15.
REF use an event study approach to examine the market entry of Turquoise in 14 European countries.
Fourteen at One Blow: The Market Entry of Turquoise
SSRN Electronic Journal
SSRN Electronic Journal
Economics