Date of Award


Degree Type

Creative Project

Degree Name

Master of Science (MS)


Economics and Finance

Committee Chair(s)

Todd Griffith


Todd Griffith


I examine the effects of a change in the minimum quotation size on liquidity and volatility in the modern over-the-counter (OTC) markets. On November 12, 2012, the Financial Industry Regulatory Agency (FINRA) introduced a pilot program to adjust the minimum quote sizes for securities transactions in the OTC markets. I find that an increase in the minimum quote size decreases OTC market quality as spreads widen and volatility increases. In contrast, I find that a decrease in the minimum quote size improves OTC market quality, but the results are sensitive to the price of the security. These results offer important insights to regulators, exchange officials, and market participants in the OTC marketplace.

Included in

Economics Commons