TICK SIZES, STOCK PRICES, AND SHARE TURNOVER: INTERNATIONAL EVIDENCE

EDWARD A. DYL (University of Arizona, Tucson)
H. DOUGLAS WITTE (University of Missouri, Columbia)
LARRY R. GORMAN (California Polytechnic State University)

Studies in Economics and Finance

ISSN: 1086-7376

Publication date: 1 February 2002

Abstract

We examine tick sizes, stock prices, and share turnover in eighteen stock markets in developed countries and find that differences in mandatory tick sizes explain a significant proportion of the variation in stock prices among markets, and that lower percentage tick sizes are not associated with higher turnover. We consider the implications of these findings for the recent decimalization of stock trading in the United States, and conclude that decimal trading is likely to result in lower stock prices (due to stock splits) with no substantial change in dollar trading volume.

Keywords

Citation

DYL, E., DOUGLAS WITTE, H. and GORMAN, L. (2002), "TICK SIZES, STOCK PRICES, AND SHARE TURNOVER: INTERNATIONAL EVIDENCE", Studies in Economics and Finance, Vol. 20 No. 2, pp. 1-18. https://doi.org/10.1108/eb028762

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MCB UP Ltd

Copyright © 2002, MCB UP Limited

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