๐”– Bobbio Scriptorium
โœฆ   LIBER   โœฆ

Stock price volatility, transactions costs and securities transactions taxes

โœ Scribed by Allen B. Atkins; Edward A. Dyl

Book ID
101287185
Publisher
John Wiley and Sons
Year
1997
Tongue
English
Weight
87 KB
Volume
18
Category
Article
ISSN
0143-6570

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โœฆ Synopsis

Securities Transactions Taxes (STTs) are intended to reduce or eliminate excessive volatility in stock prices caused by short-term speculative trading. To examine the implicit assumption that stock price volatility is caused by short-term trading, we investigate the relationship between volatility and bid-ask spreads, since short-term speculative traders and other investors with short time horizons will prefer stocks with low transactions costs. Our finding, that volatility is actually associated with high transactions costs, is inconsistent with the 'speculator' story. Our study suggests that the effect of an STT may be to impede the adjustment of stock prices to new information, rather than to curb 'excessive short-term speculation'.

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Futures trading, transaction costs, and
Futures trading, transaction costs, and stock market volatility
โœ B. Wade Brorsen ๐Ÿ“‚ Article ๐Ÿ“… 1991 ๐Ÿ› John Wiley and Sons ๐ŸŒ English โš– 689 KB

## Introduction he controversy created by "Black Monday" and the recent stock market crash Many of the proposals to deal with the perceived increased volatility' are actually proposals to increase market frictions by increasing transaction costs, increasing margins, limiting arbitrage, or banning