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a physical location dealers are connected electronically. 1. Brokered markets. Brokers offer search services, and provide information. Example: real estates and large block transactions (upstair markets) Dealer markets: markets in which traders specializing in particular assets buy and sell for their own accounts (inventories). Example: NASDAQ. Dealer Market. In a dealer market, dealers stand ready to trade for their own account thus providing liquidity to the market. Typically, current bid and ask prices are more readily available than information about closing prices and volume levels. Over-the-counter" markets are dealer markets. * Brokered market. In a brokered market, brokers attempt to match buyers with sellers but do not stand ready to trade for their own account. The broker knows the prices bid and asked by the respective parties, but each party is typically unaware of another party's price requirements-, prices of completed transactions are sometimes available. Brokered markets:Buyers and sellers rely on intermediaries to find each other. Intermediaries generally do not act as principals (e.g., residential real estate). Dealer markets:Buyers and sellers rely on intermediaries. Intermediaries often act as principals, maintaining inventories and standing ready to supply immediacy (i.e., they are willing to buy and sell when a customer demands it). In most cases, the final buyers and sellers do not have direct access to the market: they may buy and sell only by going through a dealer.
Approximate Word count = 851
Approximate Pages = 3.4
(250 words per page double spaced)
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