Match each secondary trading market tier on the left with its correct trading venue execution mechanism on the right.
- First MarketExecution of exchange-listed equity trades directly on registered national exchanges (e.g., NYSE, Nasdaq).
- Second MarketNegotiated trading of unlisted equity securities over-the-counter (OTC) through market makers.
- Third MarketOver-the-counter (OTC) trading of exchange-listed equity securities off the primary exchange floor.
- Fourth MarketDirect trading of securities between large institutional investors via Electronic Communications Networks (ECNs) without broker-dealers.
Answer
First Market pairs with exchange execution of listed equities; Second Market pairs with negotiated OTC trading of unlisted securities; Third Market pairs with OTC trading of exchange-listed securities; Fourth Market pairs with direct institutional trading via ECNs.
Each secondary market tier specifies a distinct trading mechanism: the First Market handles listed equities on registered exchanges; the Second Market handles unlisted OTC securities; the Third Market executes listed equities in the OTC market; and the Fourth Market connects institutional traders directly via ECNs.
Step-by-Step Solution
Key Concept
Secondary Trading Market Tiers (First, Second, Third, and Fourth Markets)
Estimated Time:1m 30s