What is Dealer Market?

It is also called (OTC) market. A dealer market is where dealers buy and sell a particular financial instrument electronically utilizing the accounts. In addition, without involving a third party, one makes the market by quoting the offer price (price at which they are willing to sell) and bid price (price at which they are ready to buy).

How does a dealer make the market in securities?

A dealer makes the market in securities by offering either buy or sell them at offer or bid price. It is also called (OTC) market. A dealer market is where dealers buy and sell a particular financial instrument electronically utilizing the accounts.

What is an example of an equity Dealer Market?

Bonds and foreign exchanges trade primarily in dealer markets, and stock trading on the Nasdaq is a prime example of an equity dealer market. A dealer market is a transparent financial market mechanism in which multiple dealers post the prices they are willing to buy or sell a specific security.

How do dealers become market makers?

Dealers become “market makers” by posting their bid and offer prices. The bid price is the price the dealer is willing to buy the security for, and the offer price is the price the dealer is willing to sell their security for. What are Securities and Market Makers?