Just like buying a house through a real estate broker, a brokered market is the buying and selling of any product or service where an intermediary represents one or both parties.
It is assumed that a broker working on your behalf will be able to negotiate the best possible price or get other concessions. A securities broker might have a book of buy and sell orders where they quote bids to traders. Brokers are particularly useful for going hat-in-hand to find investors for an Initial Public Offering (IPO) or a new bond issue.
And the broader notion here is that, in a brokered market, you get The Gumball Problem estimate benefit as well, i.e. with lots of people inspecting pricing, a truly fair or closer-to-honest number comes from all the bidding.
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Finance: What is an Auction Market?13 Views
Finance a la shmoop... what is an auction market.. next up on the block [Man speaking on stage]
we've got stock in the company comb Depot....
okay yeah so the New York
Stock Exchange is an auction market and you have no idea how much caffeine I had [Man holding a monster energy drink]
to have to get that right which means that the prices on the new york stock
exchange happen during a bidding process we're matching offers get you know [People frantically rushing to bid for stocks]
matched... buyers and sellers buy and sell at the
same time so in essence two transactions are happening at once the opposite of
this sort of market is the over the counter or OTC market where dealers are
the ones holding all the cards and they ultimately determine the price by [Dealer with the cards]
creating a spread from where they're willing to sell your shares and what
price they'll pay to buy your shares but in an OTC market well you don't get to [Dogs running side by side]
feel like you're watching the last leg of a greyhound race so you don't get all
my caffeinated auction talk there which is kind of cool we like that, right..right?
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