Examples of dealer market in the following topics:
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- 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.
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- 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.
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- 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.
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- The New York Stock Exchange is the world's largest stock exchange by market capitalization at $14.242 trillion as of December 2011.
- The New York Stock Exchange, commonly referred to as the NYSE, is a stock exchange, or a secondary market.
- After the initial issuance, investors can purchase from other investors in secondary markets like the NYSE.
- Secondary markets can be further subdivided into auction or dealer markets, typified by the mode of transactions.
- The NYSE is an auction market.
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- 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.
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- 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.
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- 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).
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- Primary market is for newly issued stocks and bonds, while the secondary markets allow investors to buy or sell their existing stocks or bonds.
- Dealers usually operate in the primary market, while the secondary market is an exchange.
- Presence of a secondary market increases liquidity.
- Money market instruments include: U.S.
- Money market is for securities with a maturity less than one year, while the capital market includes securities with maturities over one year.
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- Securities market institutions include investment bankers, brokers, dealers, and organized exchanges.These institutions enhance the liquidity of the secondary markets.However, these institutions are not financial intermediaries, and they do not link the savers to the borrowers.Instead, the securities market institutions help the savers locate the borrowers.
- Over-the-counter (OTC) market does not have a physical location.Telephones and computers connect the dealers and brokers together.Both new and small firms are traded in the over-the-counter market.The OTC market in the United States is the National Association of Securities Dealers' Automated Quotation (NASDAQ), or commonly referred to as NASDAQ.New high-tech firms, such as Texas Instruments had started in NASDAQ and eventually switched their listing to a major exchange.Europe has their equivalent of NASDAQ, which theEuropeans call EASDAQ.
- Market indices provide two benefits.First, the market indices provide fast information.Financial analysts calculate a market index in seconds and distribute the index to investors instantly.Second, private companies calculate the market indices.Thus, government does not influence the numbers.
- A stock market, occasionally, experiences a rapid drop in stock prices, which precipitate a stock market crash.A stock market crash means a dramatic drop in stock prices during a short time period.Unfortunately, a stock market crash bankrupts investment companies, insurance companies, pension funds, and commercial banks.Although commercial banks are not directly involved with the stock market, they may have granted loans to investors who cannot repay.Finally, a stock market crash in one market can trigger another stock market crash, even a stock market located in a foreign country.
- Stock market embodies more psychology than logic.Investors are human!
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- For example, the New York Stock Exchange is an organized exchange, while bond dealers buy and sell government and corporate bonds.
- However, a market index shows a trend of stock prices.
- A stock market crash occurs when stock prices reach a peak and quickly plummet.
- Thus, a stock market crash could lead to a financial crisis.