Trading & Securities Marketes Flashcards
What is the Primary Market?
The primary market is where securities are first made available for purchase by public investors.
What is the Secondary Market ?
The secondary market is where securities can be freely traded by other investors
What is an issuer ?
An entity that that creates securities and makes them available for purchase
What is an exchange ?
A registered marketplace for trading with listing requirements aka the 1st Market
What is the OTC marketplace?
A regulated marketplace that is not on an exchange and do not have a physical location aka the 2nd market
What is a market maker ?
A firm that is willing to buy or sell out of their inventory to complete trade in that stock at any time
What is the 3rd market?
A place where exchange listed securities can be traded OTC
What is the 4th market?
A place where trades are done via computerized trading systems called Electronic Communication Networks (ECN)
What is a broker ?
An agent that brings a buyer and seller together and is responsible for obtaining a fair and reasonable price aka middleman
What is a dealer ?
An entity that completes trades for clients by taking the other side of the trade (contra-party) by either buying or selling to the client from the own inventory at a fair and reasonable price.
What fee does a broker charge for a transaction?
A commission
What fees do Dealers charge for transactions?
A markup for a sale and a markdown for a purchase
What is the bid/ask price ?
The bid is what the dealer is willing to pay and the ask is what they are willing to sell
