Examkin

Soru

Zorluk: OrtaTypes of Markets and Trading Venues

Two major institutional investment firms agree to execute a large block trade of exchange-listed corporate stock directly with each other using an Electronic Communication Network (ECN) without the involvement of a broker-dealer. Which market trading venue segment encompasses this type of direct institution-to-institution transaction?

  1. The Fourth MarketCevap
  2. B
    The Primary Market
  3. C
    The Third Market
  4. D
    The Depository Trust & Clearing Corporation (DTCC) Network

Cevap

The Fourth Market
The Fourth Market is defined as direct trading of securities between institutional investors (such as mutual funds, pension funds, and insurance companies) through Electronic Communication Networks (ECNs) or proprietary electronic networks, completely bypassing broker-dealers.

Adım Adım Çözüm

1
Identify the trading participants and execution venue described in the scenario.
The transaction occurs directly between two institutional investors using an Electronic Communication Network (ECN) without broker-dealer intermediation.
Trading tiers in the secondary market are categorized by participant roles, execution mechanisms, and listing status.
2
Match the identified characteristics to secondary market tiers.
Direct institution-to-institution trading of listed securities through proprietary computer networks/ECNs defines the Fourth Market.
Bypassing broker-dealer commissions and market maker spreads through direct electronic trading between institutions is the core definition of Fourth Market trading.

Anahtar Kavram

Fourth Market Trading Venues
Bu soruyu puanla

Konular

Types of Markets and Trading Venues

Bu konudan daha fazla soru