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Preference

   Also found in: Dictionary/thesaurus, Legal, Encyclopedia, Wikipedia 0.01 sec.
Preference
Refers to over-the-counter trading. Selection of a dealer to handle a trade despite the dealer's market not being the best available. Often the "preferenced dealer" will then move his market in line.

Preference
The practice of executing trades and other transactions by means other than the open market. For example, if one needs roofing repairs on one's house, one may select one's brother's roofing business even if it is more expensive. In securities, preference often occurs in over-the-counter trades, especially within a brokerage. Preference can, but does not always, lead to economic inefficiency.

preference
The practice of matching customers' buy and sell orders away from the primary exchange. Preferencing is opposed by the New York Stock Exchange because it claims the practice unfairly benefits brokerage firms and doesn't give customer orders the chance to see other customer orders in a public market. Compare in-house trade.


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