Dealer's spread

Dealer's Spread

The amount a dealer earns by buying a security and then selling it to an investor. The dealer's spread is the difference between the dealer's purchase price and his/her sale price. The dealer's spread is how dealers (other than broker-dealers) make most of their profits.

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Five percent rule

References in periodicals archive ?

Because each Nasdaq stock has at least two market makers, a dealer's spread is not necessarily the inside spread.

Competitiveness and Price Setting in Dealer Markets

(P value) Bid/ask 4.90/ 4.44 spread (%) 3.22 (.0001) Table 4 Change in the relation between dealer's spreads and portfolio risk following the introduction of SIFC trading RISK = systematic risk RISK = total risk [[delta].sub.0] 0.10 (35.3 ***) 0.08 (32.0 ***) [[delta].sub.1] 1.09 (2.2 **) 1.02 (16.4 ***) [[delta].sub.2] - 0.04 (- 9.5 ***) - 0.02 (- 5.2 ***) [[delta].sub.3] - 0.89 (- 1.8 *) - 0.89 (- 13.3 ***) Sample size 2417 2417 Adj.

An empirical analysis of the impact of stock index futures trading on securities dealers' inventory risk in the NASDAQ market

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