Institutional trading and alternative trading systems

Jennifer Conrad, Kevin M. Johnson, Sunil Wahal

Research output: Contribution to journalArticlepeer-review

73 Scopus citations


We analyze the use of alternative trading systems in a large sample of institutional orders and the trades that constitute these orders. Proprietary data allow us to distinguish between orders and trades filled by day and after-hours crossing systems, electronic communication networks (ECNs), and traditional brokers. Controlling for variation in order and security characteristics, as well as endogeneity in the choice of trading venue, we find that realized execution costs are generally lower on alternative trading systems. Order handling rules and tick size changes implemented in 1997 appear to have reduced the cost advantage of trading on ECNs.

Original languageEnglish (US)
Pages (from-to)99-134
Number of pages36
JournalJournal of Financial Economics
Issue number1
StatePublished - Oct 1 2003
Externally publishedYes


  • Alternative trading systems
  • Crossing systems
  • Electronic communications networks
  • Execution costs
  • Institutional trading

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Strategy and Management


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