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| Author: | Keim, D. B. Madhavan, A. |
| Title: | The cost of institutional equity trades |
| Journal: | Financial Analysts' Journal
1998 : JUL/AUG, VOL. 54:4, p. 50-69 |
| Index terms: | Stock markets Investments Costs Portfolio management Performance appraisal USA |
| Language: | eng |
| Abstract: | There is a overview presented of the findings from the recent literature on the cost of U.S. equity trades for institutional investors and also new evidence on trading costs from a large sample of institutional trades. The findings discussed have important implications for policymakers and investors: Implicit trading costs are economically significant; equity trading costs vary considerably and vary systematically with trade difficulty and order-placement strategy; and whether trade price represents "best execution" depends on detailed data for the trade's entire order-submission process, especially information on pretrade decision variables, such as the trading horizon. |
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