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Minimum tick size, market quality and costs of trade execution in Vietnam

PloS one, 2023-05, Vol.18 (5), p.e0285821-e0285821 [Peer Reviewed Journal]

Copyright: © 2023 Vo, Doan. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. ;COPYRIGHT 2023 Public Library of Science ;2023 Vo, Doan. This is an open access article distributed under the terms of the Creative Commons Attribution License: http://creativecommons.org/licenses/by/4.0/ (the “License”), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;2023 Vo, Doan 2023 Vo, Doan ;2023 Vo, Doan. This is an open access article distributed under the terms of the Creative Commons Attribution License: http://creativecommons.org/licenses/by/4.0/ (the “License”), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;ISSN: 1932-6203 ;EISSN: 1932-6203 ;DOI: 10.1371/journal.pone.0285821 ;PMID: 37200361

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  • Title:
    Minimum tick size, market quality and costs of trade execution in Vietnam
  • Author: Vo, Duc Hong ; Doan, Bao
  • Do, Hung
  • Subjects: Costs ; Economic aspects ; Institutional investments ; Medicine and Health Sciences ; People and Places ; Policy ; Prices ; Pricing ; Profits ; Research and Analysis Methods ; Securities markets ; Securities trading ; Social Sciences ; Stock exchanges ; Stock-exchange ; Subsidies ; Suppliers ; Trade ; Vietnam
  • Is Part Of: PloS one, 2023-05, Vol.18 (5), p.e0285821-e0285821
  • Description: The Vietnamese government introduced a change in the minimum tick size for stock trading on 12 September 2016 to improve market quality and reduce trade execution costs. The intended effects of this policy have not been widely investigated in an emerging market such as Vietnam. We use data on trade and quote intraday of all stocks listed on the Ho Chi Minh Stock Exchange for the periods before and after the event, with a one-week break from 12/9/2016 to 18/9/2016, for the market to adapt to the new tick size policy. Findings from this paper confirm that the trading cost is reduced following the change to the smallest tick size. However, this is different for large trades executed at the stock price associated with a larger tick size. Furthermore, the findings are robust with a different sample period. These findings imply that introducing a change in tick size in Vietnam in 2016 is desirable for improving market quality. However, the differentiation of these changes in different ranges of stock prices is not necessarily effective for improving market quality and reducing trade execution costs.
  • Publisher: United States: Public Library of Science
  • Language: English
  • Identifier: ISSN: 1932-6203
    EISSN: 1932-6203
    DOI: 10.1371/journal.pone.0285821
    PMID: 37200361
  • Source: GFMER Free Medical Journals
    MEDLINE
    PubMed Central
    Coronavirus Research Database
    Public Library of Science (PLoS)
    ProQuest Central
    DOAJ Directory of Open Access Journals
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