Anonymous Electronic Trading Versus Floor Trading

This paper compares the attractiveness of floor trading and anonymous electronic trading systems. It is argued that in times of low information intensity, the insight into the order books of the electronic trading system provides more valuable information than floor trading; but in times of high information intensity, the reverse is true. Thus, the electronic system's market share in trading activity should decline in times of high information intensity. This hypothesis is tested by data on BUND-future trading. This future is traded on the German and on the British futures exchanges. The empirical results support the hypothesis