auction market

(noun)

an exchange where goods and services are offered up for bid, bids are taken, and then sold to the highest bidder

Related Terms

  • forwards
  • swaps
  • dealer market
  • securities

Examples of auction 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.
    • There are three main types of market organization that facilitate the trading of securities: an auction market, a brokered market, and a dealer market.
    • In the auction market format, buyers and sellers are brought together directly, announcing the prices at which they are willing to buy or sell securities.
    • The New York Stock Exchange is a notable secondary market that is structured as an auction market.
    • They will gather around the appropriate post where a "specialist" acts as an auctioneer in an open outcry auction market environment to bring buyers and sellers together and to manage the actual auction.
  • NYSE

    • Secondary markets can be further subdivided into auction or dealer markets, typified by the mode of transactions.
    • The NYSE is an auction market.
    • At the NYSE, traders gather around a specialist broker, who acts as an auctioneer in an open outcry auction market environment to bring buyers and sellers together and to manage the actual auction.
    • The auction market format aims to bring together the parties with mutually agreeing prices in an efficient manner.
    • Buyers and sellers meet and engage in face-to-face transactions at the NYSE, which is an auction-style secondary market.
  • Market Value vs. Book Value

    • Market value is the price at which an asset would trade in a competitive auction setting.
    • Market value is often used interchangeably with open market value, fair value, or fair market value.
    • In many cases, the carrying value of an asset and its market value will differ greatly.
    • If the asset is valued on the balance at market value, then its book value is equal to the market value.
    • Ways of measuring the value of assets on the balance sheet include: historical cost, market value or lower of cost or market.
  • Government Bonds

    • In the primary market, Government Bonds are often issued via auctions at Stock Exchanges.
    • There are several different methods of issuing such as auctions, including guarantee, combined auction and guarantee, and others.
    • In the secondary market, government bonds are traded at Stock Exchanges.
    • Unlikely equity system, the bond secondary market uses a completely different system with different method of trading.
    • At the secondary market, each bond will be assigned with very own bond code (ISIN code).
  • Maximizing Shareholder and Market Value

    • A goal of financial management can be to maximize shareholder wealth by paying dividends and/or causing the market value to increase.
    • There are several goals of financial management, one of which is maximizing shareholder and market value .
    • Corporate governance involves regulatory and market mechanisms and the roles and relationships between a company's management, its board, its shareholders, other stakeholders, and the goals by which the corporation is governed.
    • The idea of maximizing market value is related to the idea of maximizing shareholder value, as market value is the price at which an asset would trade in a competitive auction setting; for example, returning value to the shareholders if they decide to sell shares or if the firm decides to sell.
    • Maximizing shareholder and market value is, for some, one of the goals of financial management.
  • The Weightings

    • MVe stands for the market value of equity; MVd stands for the Market Value of Debt; Re stands for cost of equity; Rd stands for cost of debt; and t is the company's tax rate.
    • Market value is the price at which an asset would trade in a competitive auction setting.
    • It is a distinct concept from market price, which is the price at which one can transact.
    • For market price to equal market value, the market must be efficient and rational.
    • Market value also requires the element of "special value" to be disregarded.
  • Repurchasing Shares

    • The market capitalization of the company is unchanged, meaning that a reduction in the number of shares outstanding must be accompanied by an increase in stock price.
    • Open Market: The firm buys its stock on the open market from shareholders when the price is favorable.
    • Dutch Auction Self-Tender Repurchase: The company announces a range of prices at which they are willing to repurchase.
  • Discount Policy

    • Supply function for the federal funds market increases and shifts rightward.
    • Figure 4 shows the Federal Funds Market.
    • Market interest rate is i* while the equilibrium reserves are R*.
    • The Fed implemented the Term Auction Facility (TAF) Program after the 2008 Financial Crisis.
    • Thus, the Fed calms the financial markets by stating its discount policy.
  • Types of Financial Markets

    • Examples of financial markets include capital markets, derivative markets, money markets, and currency markets.
    • There are many different ways to divide and classify financial markets: for example, into general markets and specialized markets, capital markets and money markets, and primary and secondary markets.
    • Stock markets and bond markets are two types of capital markets that provide financing through the issuing of shares of stock and the issuing of bonds, respectively.
    • A key division within the capital markets is between the primary markets and secondary markets.
    • While capital markets and money markets constitute the narrower definition of financial markets, other markets are often included in the more general sense of the word.
  • Trends in Markets

    • A market trend is a putative tendency of a financial market to move in a particular direction over time.
    • The terms bull market and bear market describe upward and downward market trends, respectively, and can be used to describe either the market as a whole or specific sectors and securities .
    • A secular bear market consists of smaller bull markets and larger bear markets, while a secular bull market consists of larger bull markets and smaller bear markets.
    • A bear market is a general decline in the stock market over a period of time.
    • A market top (or market high) is usually not a dramatic event.
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