Market Structure Trading practices, and Costs Dealer market The stock is sold by dealers who stand ready to buy and sell the security for their own account In the u.s. the otc market is a dealer market ● Auction market Organized exchanges have specialists who match buy and sell orders. buy and sell orders may get matched without the specialist buying and selling as a dealer ● Automated Exchanges Computers match buy and sell orders Irwin/McGraw-Hill 8-<# Copyright o 2001 by The McGraw-Hill Commpanies, Inc. All rightsIrwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. Market Structure, Trading Practices, and Costs ⚫ Dealer Market ◼ The stock is sold by dealers, who stand ready to buy and sell the security for their own account. ◼ In the U.S., the OTC market is a dealer market. ⚫ Auction Market ◼ Organized exchanges have specialists who match buy and sell orders. Buy and sell orders may get matched without the specialist buying and selling as a dealer. ⚫ Automated Exchanges ◼ Computers match buy and sell orders