Reducing Costs of Stock Transactions: A Study of Alternative Trade Completion Systems
Vol. I: Summary of Results
Download
Download Free Electronic Document
| Format | File Size | Notes |
|---|---|---|
| PDF file | 0.8 MB | Use Adobe Acrobat Reader version 10 or higher for the best experience. |
Purchase
Purchase Print Copy
| Format | List Price | Price | |
|---|---|---|---|
| Add to Cart | Paperback21 pages | $20.00 | $16.00 20% Web Discount |
Many of the operational problems of the New York Stock Exchange originate in the trade completion part of stock trading activities. RAND has developed methods for analyzing these problems, including a simulation model to test performance implications of policy and procedural alternatives without costly actual experimentation. It is estimated that at a trading volume like that of 1968, several recommended changes would produce an annual savings of $120 million for the industry as a whole: use of partial deliveries, delivery priorities, reduction of transfer time, and reduction of other causes of delay in completing transactions — specifically, DKs (bank refuses to accept delivery), uncompared trade (no broker-to-broker delivery), and wrong denomination (stock transfer required). These savings are net of the outlays required to accomplish the essential changes in the operating system. At higher levels of trading, when the NYSE handles 20 million shares per day and the activity in the other markets increases correspondingly, savings would be approximately $177 million.
This report is part of the RAND Corporation Report series. The report was a product of the RAND Corporation from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.
This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.