Explain the types of secondary market trading structures, Financial Management

Assignment Help:

Compare and contrast the various types of secondary market trading structures. 

Answer:  There are two major types of secondary market trading structures:  dealer and agency.  In a dealer market, the dealer works like a market maker for the security, holding an inventory of the security.  The dealer buys at his bid price and sells at his inquired price from this inventory.  All public trades undergo the dealer.  In an agency market, public trades undergo the agent who matches it along with another public trade.  Both of the dealer and agency markets can be uninterrupted trade markets, but non-continuous markets tend to be only agency markets.  Specialist markets, Over-the-counter trading, and automated markets are types of continuous market trading systems.  Call markets and crowd trading are every types of non-continuous trading market systems.  Continuous trading systems are wanted for actively traded issues, while call markets and crowd trading present benefits for smaller markets with many thinly traded issues as they mitigate the possibility of sparse order flow over short time periods.


Related Discussions:- Explain the types of secondary market trading structures

Importance of wbs in the project communication process, Due to the complex...

Due to the complexity of the tasks involved in many projects, communication of responsibility for those tasks is often helped by means of graphical planning techniques.

Cost of capital, ABC Ltd. Produces electronic components with a selling pri...

ABC Ltd. Produces electronic components with a selling price per of Rs.100. Fixed cost amount to Rs.2,00,000/- 5000 units are produced and sold each year. Annual profits amount to

Sovereign bonds, There are two major factors to be considered while a...

There are two major factors to be considered while analyzing sovereign bonds. They are: economic risk and political risk. Economic risk is all about the ability a

How can we measure the present value, How can we measure the Present Value ...

How can we measure the Present Value When we solve for present value, rather than compounding the cash flows to the future, we discount future cash flows to present value to ma

Importance of capital budgeting decision, Q. Importance of Capital Budgetin...

Q. Importance of Capital Budgeting Decision? 1. Such Decision affect the profitability of the Firm: - Capital Budgeting decision influences the long-term profitability of a fir

Illustrate the meaning of gearing, Illustrate the meaning of Gearing G...

Illustrate the meaning of Gearing Gearing is the relationship between equity anddebt. Debt is typically long term liabilities that the organisation has. Equity is all the shar

Required rate of return , Required Rate of Return (R i )  The required...

Required Rate of Return (R i )  The required rate of return (Ri) is the minimum rate of return that a project must generate if it has to receive funds.  It’s thus the opportun

Swing traders, Swing Traders Swing trading is more or less similar to d...

Swing Traders Swing trading is more or less similar to day trading except that swing traders will normally have a longer holding period during a working day. Swing traders also

Accounts receivable are sometimes not collected, Accounts receivable are so...

Accounts receivable are sometimes not collected.Why do companies extend trade credit when they could insist on cash for all sales? Extending trade credit almost for all the tim

Guaranteed income supplement, In addition to the public pension plans, Rob ...

In addition to the public pension plans, Rob and Ellen also have RRSPs.  What options will they have when they retire if they want to draw money from their RRSPs?  Identify one str

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd