dealer market

(noun)

an exchange where institutions are assigned to a particular security and trade out of their own account

Related Terms

Examples of dealer market in the following topics:

  • Types of Market Organizations

    • There are three main types of market organization that facilitate trading of securities: auction market, brokered market, and dealer market.
    • In the U.S., over-the-counter trading in stock is carried out by market makers that make markets in OTCBB and Pink Sheets securities using inter-dealer quotation services such as Pink Quote (operated by Pink OTC Markets) and the OTC Bulletin Board (OTCBB).
    • There are three main types of market organization that facilitate the trading of securities: an auction market, a brokered market, and a dealer market.
    • Dealer markets, also called quote-driven markets, centers on market-makers (or dealers) who provide the service of continuously bidding for securities that investors want to sell and offering securities that investors want to buy.
    • Dealers earn a profit on the bid-offer spread.

  • Price Transparency

    • Since bonds are traded in a decentralized, over-the-counter market dominated by dealers, there can be a lack of price transparency.
    • Rather, in most developed bond markets such as the United States, Japan, and western Europe, bonds trade in decentralized, dealer-based, over-the-counter markets.
    • In such a market, market liquidity is provided by dealers and other market participants committing risk capital to trading activity.
    • Bond markets can also differ from stock markets in that, in some markets, investors sometimes do not pay brokerage commissions to dealers with whom they buy or sell bonds.
    • In summary, since bonds are traded in a decentralized, over-the-counter market dominated by dealers, there is a lack of price transparency for bond markets.

  • NASDAQ

    • The NASDAQ is an American dealer-based stock market in which the dealers sell electronically to investors or firms.
    • The NASDAQ Stock Market, also known simply as the NASDAQ, is an American stock exchange.
    • The NASDAQ is a dealer-based market in which stock dealers sell directly to investors or firms electronically via phone or Internet.
    • A stock index or stock market index is a method of measuring the value of a section of the stock market.
    • NASDAQ is the second-largest stock exchange market in the world, as of 2012.

  • The Market

    • The key components of the art market are the gallery, curator, dealer, consultant, and collector.
    • The important players in the art market are the gallery, curator, dealer, consultant, and collector.
    • Art dealers are persons or companies who buy and sell works of art.
    • Dealers are often able to anticipate market trends, and some prominent dealers might be able to influence the taste of the market.
    • Summarize the roles of the gallery, curator, dealer, consultant, and collector in the art market

  • Commercial Paper

    • The issuer can market the securities directly to a buy and hold investor such as most money market funds.
    • Alternatively, it can sell the paper to a dealer, who then sells the paper in the market .
    • The dealer market for commercial paper involves large securities firms and subsidiaries of bank holding companies.
    • Most of these firms are also dealers in US Treasury securities.
    • Dealer fees tend to be lower outside the United States .

  • Introducing Exchange Rates

    • Exchange rates are determined in the foreign exchange market, which is open to a wide range of buyers and sellers where currency trading is continuous.
    • In the retail currency exchange market, a different buying rate and selling rate will be quoted by money dealers.
    • The buying rate is the rate at which money dealers will buy foreign currency, and the selling rate is the rate at which they will sell the currency.
    • In the retail currency exchange market, a different buying rate and selling rate will be quoted by money dealers.
    • Explain the concept of a foreign exchange market and an exchange rate

  • Securities Exchange Act of 1934

    • It regulates stock exchanges, brokers, dealers, and even private traders.
    • The '34 Act also regulates broker-dealers without a status for trading securities.
    • This system is called NASDAQ, standing for the National Association of Securities Dealers Automated Quotation System.
    • The alternative trading system, or ATS, is a quasi exchange where stocks are commonly purchased and sold through a smaller, private network of brokers, dealers, and other market participants.
    • ATS acts as a niche market, a private pool of liquidity.

  • Federal Open Market Committee

    • The Fed Bank of New York deals with about 40 dealers who specialize in U.S. government securities (i.e. secondary market).
    • The New York Fed and dealers are connected electronically.
    • Then the Fed buys or sells to the dealers with the best offer.
    • Second, open-market operations are very flexible.
    • Finally, the Fed can implement open-market operations very quickly.

  • The Stock Exchanges

    • Stock exchange "specialists" play a crucial role in the process, helping to keep an orderly market by deftly matching buy and sell orders.
    • The largest number of different stocks and bonds traded are traded on the National Association of Securities Dealers Automated Quotation system, or Nasdaq.
    • This so-called over-the-counter exchange, which handles trading in about 5,240 stocks, is not located in any one place; rather, it is an electronic communications network of stock and bond dealers.
    • The National Association of Securities Dealers, which oversees the over-the-counter market, has the power to expel companies or dealers that it determines are dishonest or insolvent.
    • Because many of the stocks traded in this market are from smaller and less stable companies, the Nasdaq is considered a riskier market than either of the major stock exchanges.

  • Secondary Market Organizations

    • The secondary market is the financial market in which previously issued instruments such as stock, bonds, options, and futures are bought and sold.
    • The secondary market, also known as the aftermarket, is the financial market where previously issued securities and financial instruments such as stock, bonds, options, and futures are bought and sold.
    • After the initial issuance, investors can purchase from other investors in the secondary market.
    • Most bonds and structured products trade "over the counter," or by phoning the bond desk of one's broker-dealer.
    • In the U.S., over-the-counter trading in stock is carried out by market makers that make markets in OTCBB and Pink Sheets securities using inter-dealer quotation services such as Pink Quote (operated by Pink OTC Markets) and the OTC Bulletin Board (OTCBB).