Inter-Dealer Trades in OTC Markets - Who Buys and Who Sells?

B-Tier
Journal: Review of Economic Dynamics
Year: 2021
Volume: 39
Pages: 220-257

Authors (2)

Chung-Yi Tse (Leicester University) Yujing Xu (not in RePEc)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In an OTC market where dealers' inventory capacities differ, dealers trade among themselves to rebalance inventories for facilitating the sale and purchase of the asset to and from their investor clients. In a market where the asset is sold quickly, the small-capacity dealers sell to the large-capacity dealers to help them replenish their inventories. Conversely, in a slow market where it takes a relatively long time for the asset to be sold, the small-capacity dealers buy from the large-capacity dealers to help them free up inventory capacities. The prediction, though counterintuitive, is supported by some available empirical evidence. (Copyright: Elsevier)

Technical Details

RePEc Handle
repec:red:issued:18-336
Journal Field
Macro
Author Count
2
Added to Database
2026-01-29