Market Microstructure and Price Discovery in Financial Markets

Authors

  • Dr. Imran Shahzad Department of Finance, Lahore University of Management Sciences (LUMS), Lahore, Pakistan. Author

Keywords:

Market microstructure, Price discovery, Order flow, Market liquidity, Information asymmetry

Abstract

 

This scholarly article provides an in-depth exploration of market microstructure and its role in price discovery within financial markets. Market microstructure encompasses the processes and mechanisms that govern the trading environment, influencing the formation of prices and the efficiency of market transactions. The article reviews key concepts in market microstructure, such as order flow, market liquidity, and information asymmetry, and analyzes their impact on price discovery. By synthesizing theoretical foundations and empirical evidence, the article contributes to a comprehensive understanding of the intricate dynamics that shape financial market prices.

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Published

2022-12-31

Issue

Vol. 6 No. 01 (2022): Journal of Applied Finance and Economic Policy

Section

Research Articles

License

Copyright (c) 2022 Dr. Imran Shahzad (Author)

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

All articles in the Journal of Applied Finance and Economic Policy are published under the Creative Commons Attribution 4.0 (CC BY 4.0) license. Users may share, distribute, and adapt the content for any purpose, including commercial use, provided proper credit is given to the authors and the journal.