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Race to the Center Competition for the Nikkei 225 Futures Trade

This paper examines the impact of changes in margin requirements on returns, transaction volumes, and price volatility of Nikkei 225 futures on the Osaka Securities Exchange (OSE) and the Singapore International Monetary Exchange (SIMEX). An increase in margin requirement on one exchange is shown to...

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Bibliographic Details
Main Author: Ito, Takatoshi
Other Authors: Lin, Wen-Ling
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1996
Series:IMF Working Papers
Subjects:
Payment Systems
Stock Exchanges
Finance
Regimes
Arbitrage
Option Pricing
Money
Investments: Commodities
Futures Pricing
Commodities
Standards
Financial Markets
Currencies
Futures
Government And The Monetary System
Institutional Investors
Pension Funds
Investments: Futures
Monetary Economics
Financial Institutions
Contingent Pricing
General Financial Markets: Government Policy And Regulation
Financial Instruments
General Financial Markets: General (includes Measurement And Data)
Derivative Securities
Non-bank Financial Institutions
Stock Markets
Monetary Systems
Investment & Securities
Futures Markets
Money And Monetary Policy
Finance: General
Singapore
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper examines the impact of changes in margin requirements on returns, transaction volumes, and price volatility of Nikkei 225 futures on the Osaka Securities Exchange (OSE) and the Singapore International Monetary Exchange (SIMEX). An increase in margin requirement on one exchange is shown to reduce trading volume in the implementing exchange and to shift trade to the competing exchange. Price volatility or returns are not systematically affected by changes in margin requirements. The loss of OSE’s market share of Nikkei futures trade is partly due to the increased transactions costs (relative to SIMEX), including the margin requirement
Physical Description:50 pages
ISBN:9781451941579

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