Costless trading in a financial market
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stephi
Apprentice
Joined: 22 Dec 2007
Posts: 6
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 Posted: 06/19/08 - 05:43 Post subject: |
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| Hello. I have heard that one condition of a perfectly competitive financial market is that trading should be costless in a financial market. So why do people often claim that a perfectly competitive financial market is not able to be established in practice? Aren't some trading possibilities costless? Please clarify. |
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lyman
Apprentice
Joined: 22 Dec 2006
Posts: 8
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| Posted: 07/19/08 - 01:06 Post subject: |
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| Perhaps that is true, but that does not mean that the other conditions are also fulfilled. Because the basic aim of the perfectly competitive financial market is that it is fair, since nobody can influence or change prices. For that to be possible there needs to be a large trading pool and information about every aspect of trading needs to be publicly available. |
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