Economics & Finance / Finance & Investment / Stock & Capital Markets
Who Really Controls Stock Prices? The Shocking Truth About Cross-Border Listings
Think your home market sets the price of your stocks? Think again. This video dives into a groundbreaking 2003 study from The Journal of Finance by Cheol S. Eun and Sanjiv Sabherwal. They analyzed 62 Canadian stocks trading on both the Toronto Stock Exchange (TSE) and U.S. exchanges (NYSE, AMEX, Nasdaq). The findings are wild: the U.S. market accounts for up to 38.1% of price discovery on average, and for some stocks, like Biovail, nearly 100% of the pricing power moves to the U.S. We break down why—from trading volume and costs to sneaky medium-sized trades—and reveal the three key factors that decide who really sets the price. You'll learn how liquidity grabs control, why NYSE beats Nasdaq in pricing efficiency, and what this means for your investments. No jargon, just the raw truth about global markets. Watch to see if your stock's price is actually being made somewhere else.
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