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Fourth market

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Fourth market
Refers to the practice of institutional investors trading large blocks of securities directly to avoid brokerage commissions. See: Instinet.

fourth market
The market for securities in which large investors bypass exchanges and dealers in order to trade directly among themselves. Compare secondary market, third market. See also Autex, Instinetr.

Fourth market. Institutional investors, including mutual fund companies and pension funds, who trade large blocks of securities among themselves are operating in what's called the fourth market.

Usually, the transactions are handled through electronic communications networks (ECNs).

Among the appeals of using an ECN are reduced trading costs, the ability to trade after hours, and the fact that offers to buy and sell are matched anonymously.



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