ANATOMY OF THE TRADING PROCESS - EMPIRICAL-EVIDENCE ON THE BEHAVIOR OF INSTITUTIONAL TRADERS

This paper examines the behavior of institutional traders. We use uniq ue data on the equity transactions of 21 institutions of differing inv estment styles which provide a detailed account of the anatomy of the trading process. The data include information on the number of days ne eded to fill an order and types of order placement strategies employed . We analyze the motivations for trade, the determinants of trade dura tion, and the choice of order type. The analysis provides some support for the predictions made by theoretical models, but suggests that the se models fail to capture important dimensions of trading behavior.