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Overnight block trades in the Korean stock market

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  • Chune Young Chung
  • Seok‐Kyun Hur
  • Suk Bong Kim

Abstract

We examine the characteristics of overnight block trades in the Korean stock market from 2004 to 2015. We find that the discount on the offering price is negatively related to the number and return volatility of shares, the offering price is higher for firm‐commitment contracts than for best‐effort contracts, the discount level is lower for larger deal values under best‐effort contracts, commission fee rates and fees are more pronounced under firm‐commitment contracts, and a deal's uncertainty is related to the firm's contract choice. The incentives of sellers and investment banks are aligned unless sellers face an informational disadvantage.

Suggested Citation

  • Chune Young Chung & Seok‐Kyun Hur & Suk Bong Kim, 2020. "Overnight block trades in the Korean stock market," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(3), pages 2231-2261, September.
    • Handle: RePEc:bla:acctfi:v:60:y:2020:i:3:p:2231-2261
    DOI: 10.1111/acfi.12467
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