Cleaning house

Stock reassignments on the NYSE

Amber Anand, Sugato Chakravarty, Chairat Chuwonganant

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

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.

Original languageEnglish (US)
Pages (from-to)727-753
Number of pages27
JournalJournal of Financial Markets
Volume12
Issue number4
DOIs
StatePublished - Nov 2009

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New York Stock Exchange
Cleaning
Industry
Cost of capital
Liquidity

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance

Cite this

Cleaning house : Stock reassignments on the NYSE. / Anand, Amber; Chakravarty, Sugato; Chuwonganant, Chairat.

In: Journal of Financial Markets, Vol. 12, No. 4, 11.2009, p. 727-753.

Research output: Contribution to journalArticle

Anand, Amber ; Chakravarty, Sugato ; Chuwonganant, Chairat. / Cleaning house : Stock reassignments on the NYSE. In: Journal of Financial Markets. 2009 ; Vol. 12, No. 4. pp. 727-753.
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