- Auction markets
- Auction markets differ from dealer
markets in two ways. First, an auction market or exchange has a physical
location (like Wall Street). Second in a dealer market, most of the buying
and selling is done by the dealer. The primary purpose of an auction market,
on the other hand, is to match those who wish to sell with those who wish
to buy. Dealers play a limited role.
The equity shares of most of the large firms in the United States trade in organized auction markets. The largest such market is the New York Stock Exchange (NYSE). Other auction exchanges include the American Stock Exchange (AMEX) and regional exchanges such as the Pacific Stock Exchange.
There are many large and important financial markets outside the United States, of course, and U.S. corporations are increasingly looking to these markets to raise cash. The Tokyo Stock Exchange (TSE) and the London Stock Exchange (LSE) are two well-known examples.
