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In the dealer market, transactions occur through dealers who buy and sell securities for their own accounts, acting as intermediaries between buyers and sellers. These dealers maintain an inventory of securities, providing liquidity by quoting prices at which they are willing to buy (bid) or sell (ask) specific securities. Transactions are typically executed over-the-counter (OTC), allowing for more flexible trading environments compared to traditional exchanges. This market structure facilitates the trading of a wide range of financial instruments, including stocks, bonds, and derivatives.

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1w ago

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Related Questions

Is the nasdaq a dealer market?

No, the NASDAQ is not a dealer market; it is classified as an electronic exchange. Unlike dealer markets, where transactions occur through brokers who hold inventory of securities, NASDAQ operates through a network of computers that facilitate trades directly between buyers and sellers. Market makers in NASDAQ provide liquidity by quoting prices at which they are willing to buy and sell securities, but they do not hold the same inventory as in traditional dealer markets.


Do you have to have a broker or dealer for a dealer paper?

No, you do not necessarily need a broker or dealer to engage in dealer paper transactions. Dealer paper refers to short-term promissory notes issued by a financial institution or corporation, and these can be bought or sold directly between parties without the need for an intermediary. However, brokers or dealers can facilitate transactions and provide access to a broader market.


Where are most money market transactions made?

Most money market transactions are made in marketable securities.


What are the example of dealer market?

Examples of dealer markets include the Nasdaq, where dealers facilitate trades by buying and selling securities for their own accounts, and the foreign exchange market, where dealers quote prices for currency pairs. Additionally, the bond market often operates as a dealer market, with brokers and dealers providing liquidity by holding inventories of bonds. These markets rely on dealers to maintain an orderly flow of transactions and provide pricing information to buyers and sellers.


What is the difference between dealer and stock markets?

differance between stock market and dealer market?


Can the bank see all of your transactions?

Banks can typically see all of your transactions that occur within your account with them.


Is dealer commercial paper money market or capital market?

Money Market


What is lead arbitrage?

You +1'd this publicly. UndoArbitrage is not simply the act of buying a product in one market and selling it in another for a higher price at some later time. The transactions must occur ...


The accounting method that records transactions as they occur is called?

accrual


How can market failure occur in the market for hybrid automobiles?

market failure can occur when there is no money left to keep it running


The original sale of securities by governments and corporations occurs in the what market?

dealer market


Under what circumstances are secondary market transactions needed?

Secondary market transactions may be needed to correct interregional imbalances in the supply of and demand for mortgage credit, or to move mortgage assets from one type of institution to another within the same market area