Third market

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Third market

Third Market

The trading of listed securities on the over-the-counter market. The third market avoids the commissions that must be paid to floor brokers. Most of the time, trades on the third market are large block trades involving institutional investors. Dealers must fill orders on the exchange before offering them over-the-counter.

third market

The over-the-counter dealer market in stock that is listed on organized exchanges such as the New York Stock Exchange. The third market developed in the 1960s when institutional investors became dissatisfied with the liquidity and brokerage commissions for large security trades on the exchanges. Compare fourth market, secondary market.

Third market.

Exchange-listed securities, such as those that are traded on the New York Stock Exchange (NYSE) or the American Stock Exchange (AMEX), may also be bought and sold off the exchange, or over-the-counter (OTC), in what is known as the third market.

Typically, third-market transactions are large block trades involving securities firms and institutional investors, such as investment companies and pension funds.

With the growth of electronic communications networks (ECNs), more institutional investors are buying and selling in this way. Among the appeals of the third market are speed, reduced trading costs, and anonymity.