nancy 's Public Library

What Types of Financial Market Structures Exist?

The costs of collecting and aggregating information determine, to a
large extent, the types of financial market structures that emerge.
These structures take four basic forms:

• Auction markets conducted through brokers;
  
  
• Over-the-counter (OTC) markets conducted through
  dealers;
  
  
• Organized Exchanges, such as the New York Stock Exchange,
  which combine auction and OTC market features. Specifically, organized
  exchanges permit
  buyers and sellers to trade with each other in a centralized
  location, like an auction. However, securities are traded on the
  floor of the exchange with the help of specialist traders who
  combine broker and dealer functions. The specialists broker trades but
  also stand ready to buy and sell stocks from personal inventories if
  buy and sell orders do not match up.
  
  
• Intermediation financial markets conducted through
  financial intermediaries;