TY - JOUR
T1 - Cleaning house
T2 - Stock reassignments on the NYSE
AU - Anand, Amber
AU - Chakravarty, Sugato
AU - Chuwonganant, Chairat
PY - 2009/11/1
Y1 - 2009/11/1
N2 - A frequently occurring, yet unexplored, phenomenon of the New York Stock Exchange specialist system is that of reassignments of stocks by specialist firms on the floor of the Exchange. These events change the portfolios at the individual specialist level by reassigning one or more stocks from one individual specialist portfolio to another. We find that reassigned stocks have unusually wide spreads before reassignments and experience a decline in spreads to levels comparable to matched stocks after the reassignment. This improvement in liquidity is associated with a reduced cost of capital for the reassigned firms. We find that portfolio size, and industry and size concentration of the individual specialist portfolios are associated with the decision of specialist firms to reassign stocks.
AB - A frequently occurring, yet unexplored, phenomenon of the New York Stock Exchange specialist system is that of reassignments of stocks by specialist firms on the floor of the Exchange. These events change the portfolios at the individual specialist level by reassigning one or more stocks from one individual specialist portfolio to another. We find that reassigned stocks have unusually wide spreads before reassignments and experience a decline in spreads to levels comparable to matched stocks after the reassignment. This improvement in liquidity is associated with a reduced cost of capital for the reassigned firms. We find that portfolio size, and industry and size concentration of the individual specialist portfolios are associated with the decision of specialist firms to reassign stocks.
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U2 - 10.1016/j.finmar.2009.07.001
DO - 10.1016/j.finmar.2009.07.001
M3 - Article
AN - SCOPUS:70349751514
VL - 12
SP - 727
EP - 753
JO - Journal of Financial Markets
JF - Journal of Financial Markets
SN - 1386-4181
IS - 4
ER -