Dealer

Dealer

An entity that stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). Individual or firm acting as a principal in a securities transaction. Principals are market makers in securities, and thus trade for their own account and risk. Antithesis of broker. See: Agency.

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dealer

An individual or a firm that buys assets for and sells assets from its own portfolio as opposed to bringing buyers and sellers together. In practice, many firms operate as broker-dealers and perform both services depending on the market conditions and on the size, type, and security involved in a particular transaction. Dealers are sometimes able to offer investors better prices, but they may tend to make recommendations based on their own ownership positions. Compare broker.

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Dealer

A person or company that trades securities on its own behalf. That is, a dealer is a principal in a transaction; it neither does business on behalf of a client nor facilitates transactions between parties. In the United States, dealers are regulated by the SEC, and must be trading securities as a business. If an individual trades securities privately, that person is said to be a trader and is subject to different regulations. See also: Agent, Broker, Broker-dealer.

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Dealer. Dealers, or principals, buy and sell securities for their own accounts, adding liquidity to the marketplace and seeking to profit from the spread between the prices at which they buy and sell.

In the over-the-counter market, in most cases, it is dealers -- also called market makers -- who provide the bid and ask quotes you see when you look up the price of a security.

Those dealers are willing to commit their capital to specific securities and are ready to trade the securities at the quoted prices.

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Dealer

A person or firm that regularly buys and sells property. A person is classified as a dealer if at the time of the sale, that person held the property primarily for sale to customers in the ordinary course of business. Gains from the sale of such property are ordinary gains not capital gains.