Liquidity and retail traders: the case of Saudi Stock Exchange

We investigate whether retail traders price liquidity. We use data from a market that has both domination of retail trading and an absence of market makers, specifically the stock market of Saudi Arabia. Using seven liquidity proxies, we find that retail traders do not price stock market liquidity.

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Bibliographic Details
Published inApplied economics letters Vol. 27; no. 12; pp. 1033 - 1037
Main Authors M. Al-Awadhi, Abdullah, Alhashel, Bader S.
Format Journal Article
LanguageEnglish
Published London Routledge 11.07.2020
Taylor & Francis LLC
Subjects
Dominance
Economic analysis
Economic theory
Economics
Liquidity
retail traders
Saudi stock exchange
Securities markets
Stock exchanges
stock returns
Trading
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Summary:We investigate whether retail traders price liquidity. We use data from a market that has both domination of retail trading and an absence of market makers, specifically the stock market of Saudi Arabia. Using seven liquidity proxies, we find that retail traders do not price stock market liquidity.
ISSN:1350-4851
1466-4291
DOI:10.1080/13504851.2019.1659486