Question

Describe the trading practices in dealer markets, specialist-directed stock exchanges, and electronic communication networks.

Answer 1

Trading Practice in dealer market are :-

A dealer market is Just like or similiar to financial market. In the Dealer Market There are many number of Dealers who can post the prices at which they want to buy or sell the securities of any company or Specific security of instrument. In the Dealer market , a dealer is generally a market maker. It helps in providing proper Liquidity or Transparency by Showing the prices at which he wants to make a market via electronically medium It indicates both the buying and selling prices of th security at which dealer is ready.

Trading Practices in specialist-directed stock exchanges are as follows:-

A specialist is a person who is the member of the stock exchange It generally acts as a market maker It also helps in facilitating the trading for the investors in the stock exchanges In this the specialists is already holds the inventory of the company If in any case the buying or selling pressure comes then they release their stocks for maintaining the balance.

trading practices in electronic communication networks are as follows :-

In the electronic communication network there is a automated system which works automatically. It matches all the buying and selling orders of the securities, It helps to connect various individual customers that help them to trade directly without the help of the middleman And that helps the investors or traders in various locations that helps to do trading quickly and very easily