Listed Stock or Listed Security Definition
Security means an instrument for the purpose of investment in the productivity of others. For example, stock shares, bonds, options, swaps, investment contract, are all securities. A Listed Security or Listed Stock is sold on a public exchange. This security is displayed on the official list of stocks for sale on the exchange.
A Little More on What is a Listed Security
The securities that are not listed are traded in the “Over the Counter” (OTC) market. Other names of the Listed Security are Quoted Security or Listed Investment. It can be a bond, ETF (Exchange Traded Fund), stock, mutual fund, derivative, or any other type of security that is traded on the national exchange.
Exchanges on which a listed security may be sold include, the New York Stock Exchange or NASDAQ (National Association of Securities Dealers Automated Quotation System). The New York Stock Exchange (sometimes called the “Big Board”) is likely the most famous exchange in the world, have been around since 1792.
Listed Stock is considered more well-settled as compared to the privately held organizations; however, it is not always true.
These filings contain the details of the business operations of a company as well as its financial performance. As an example, the 10-K is a form which a company that has the listed securities must have to file with the Securities and Exchange Commission (SEC) in the United States.
The disclosure, particular elements and requirements of the disclosure of 10-K bonds, stocks, securities, exchange-traded funds, derivatives and mutual funds are dictated by SEC regulations S-K and S-X along with the instructions in 10-K form. A company can use all these things as listed securities. If the price of a listed stock rapidly increases or decreases, the exchanges might have to restrict trading.
References for Listed Security
Academic Research on Listed Stock
Internationally cross-listed stock prices during overlapping trading hours: price discovery and exchange rate effects, Grammig, J., Melvin, M., & Schlag, C. (2005). Internationally cross-listed stock prices during overlapping trading hours: price discovery and exchange rate effects. Journal of Empirical Finance, 12(1), 139-164. The author evaluates exchange rates and equity quotes for three German companies from NYSE (New York Stock Exchange) and XERTA (an identifier code of the market) Frankfurt. This analysis was made in the overlapping trade hours. The purpose was to check where the price discovery takes place and how the security prices adjust to the ERS (Exchange Rate Shock). Outcomes are; (1) the Exchange Rate (ER) is derived according to the stock prices. (2) The innovations of the ER are more vital to understand the development of NYSE prices as compared to XETRA prices. (3) The basic or random walk element of company value is fixed in Frankfurt.
The impact of transaction costs on price discovery: Evidence from cross-listed stock index futures contracts, Frino, A., & West, A. (2003). Pacific-Basin Finance Journal, 11(2), 139-151. This paper discusses the differences in SIMEX (Singapore International Monetary Exchange) and OSE (Osaka Securities Exchange) Nikkei 225 future trading of the stock index. This is to provide new proofs on the TCH (Transaction Cost Hypothesis). The results are higher margins on PSE relevant to SIMEX and brokerage commissions at peak. Both of them lead returns on the Nikkei 225 Index. Comparatively, SIMEX returns lead OSE returns strongly.
A tale of two time zones: The impact of substitutes on cross-listed stock liquidity, Moulton, P. C., & Wei, L. (2009). Journal of Financial Markets, 12(4), 570-591. This paper evaluates how the partial day accessibility of near alternatives influences the market quality of listed stocks in Europe. In simple words, the shares of firms, trading in home markets but they are not fully exchangeable. More liquidity provision and limited spreads in the overlapping trade hours affect the availability of more alternatives. The author shows the richer image of the specialists, their intraday activities and also presents a new proof of market integration.
The role of cross-listed stock as an acquisition currency: Evidence from takeovers of US firms, Burns, N. (2004). This study explains how acquisitions held across the border are financed. A comparison of listed bidders of the United States acquisitions is made with the listed bidders who are non-crossed. In the cross-listing, a foreign company minimises the paying cost for acquisitions with the capital. It increases the rights of investors who are in minority and lessens the barriers to possession of its shares held by the investors of the United States. Cross-listed companies using capital pay ten percent on average. It is less as compared to non-cross listed companies that pay in cash.
Market risk in demutualized self-listed stock exchanges: An international analysis of selected time-varying betas, Worthington, A., & Higgs, H. (2006). Global Economic Review, 35(3), 239-257. This research is an examination of the market risk in 4 self-listed and demutualized stock exchanges, i.e. the Deutsche Borse, Singapore Stock Exchange, London Stock Exchange and Australian Stock Exchange. MSCI (Morgan Stanley Capital International Index) and the Daily Company give the corresponding assets and information of the market portfolio. In order to calculate the time changing betas from every listed exchange until 2005, a model of bivariate Garch is used. As a result, there’s fairly large beta volatility and mean reverting betas.
How smooth is price discovery? Evidence from cross-listed stock trading, Chen, H., Choi, P. M. S., & Hong, Y. (2013). Journal of International Money and Finance, 32, 668-699. The parity adjustment may be linear for a pair of cross-listed securities. When price fluctuation is well profitable, it may converge fast. The author presents a model of TEC (Threshold Error Correction). This is to estimate the Canadian shares invested in the New York Stock Exchange and TSE (Toronto Stock Exchange). The statistical implications are; (1) NYSE and TSE integrate as the time passes. (2) in the NYSE, parity convergence moves faster in case of discounts. (3) When the price interval becomes more than the threshold, NYSE provides a great response. (4) informed investors cluster on New York SE in case of discounts (5) Private data, aggregate risks, liquidity measures and market friction influence the shares and threshold.
Audit committee practice in the Polish listed stock companies. Present situation and development perspectives, Szczepankowski, P. (2012). Business, Management and Education, 10(1), 50-65. This paper discusses the practice of audit committee in the PLS (Polish Listed Stock) firms. It highlights the current situation of the Stock Exchange Market and provides information about its development prospects.
Decimalization and competition among stock markets: Evidence from the Toronto Stock Exchange cross-listed securities, Ahn, H. J., Cao, C. Q., & Choe, H. (1998). Journal of Financial Markets, 1(1), 51-87. This is a thorough study on the effects of TSE (Toronto Stock Exchange) decimalisation on the rivalry for the flow of order. The spreads reduce by twenty-seven percent on Toronto SE securities cross-listed on AMEX/NYSE. The spreads decrease by sixteen percent and eight percent on NASDAQ and Toronto SE securities cross-listed on NASDAQ. However, the flow of order doesn’t travel to TSE from the markets of the United States. So, the savings in the transaction cost of Toronto SE don’t offset the advantages of trading on AMEX/NYSE. Dealers of NASDAQ may not be able to operate efficiently like perfect competition.
Information, trading volume, and international stock return comovements: Evidence from cross-listed stocks, Gagnon, L., & Karolyi, G. A. (2009). Journal of Financial and Quantitative Analysis, 44(4), 953-986. The authors examine the combined dynamics of trading vol. 556 cross-listed foreign securities and returns in the markets of the United States. The trading models of heterogeneous agents explain how the quality of data signals of investors is affected by the trading vol. Similarly, how it assists in disentangling either returns are connected to the trades which are portfolio rebalancing. The authors assume that returns in the market of the United States tend to continue overflowing into the home market on high vol. days. There is a high risk of informed trading. The statistical evidence confirms the association between data, trading vol and global stock returns that end old statistical investigations.
Cross-Autocorrelation of Dual-Listed Stock Portfolio Returns: Evidence from the Chinese Stock Market, Wang, D., & Pearson, A. (2006). Society for Computational Economics. In this research, the authors use a GARCH model to check the cross-autocorrelation design in daily portfolio outcomes along with the dual listed securities net the Chinese SE market pre-opened and post-opened B share market in China. In its reaction, a variation seems to be found from under-reaction to over-reaction. Hence, a rare -ve cross auto-correlation generates. The outcomes are that data spread in the market consists of portfolio returns of A share. It is strongly linked to the structure of autocorrelation. So, data asymmetry is not sufficient to clear the relation of lead-lag. The behaviour of the investor should be kept in view.
Kazakhstani Cross-Listed Stock Prices, Efficiency Market and IPO, Lee, K. J., & Yerbassova, A. (2013). European Scientific Journal, ESJ, 9(31). This paper takes into account the prices of cross-listed Kazakhstani stock. The efficiency market and initial public offerings are analyzed in detail.