Arm's Length Market

Dictionary Says

Definition of 'Arm's Length Market'

A financial market consisting of parties that have no relationship or contact with one another aside from the transaction at hand. In the United States, the majority of exchanges are considered to be arm's length, where buyers and sellers are matched according only to the details of a transaction. The two parties will often never know they were involved with each other.
Investopedia Says

Investopedia explains 'Arm's Length Market'

An arm's length market is based on the principle that parties should have equal influence in transactions. Furthermore, it removes opportunities for deals derived from personal relationships, which may manipulate the market.

Related Definitions

  • Arm's Length Transaction

    A transaction in which the buyers and sellers of a product act independently and have no relationship to each other. The concept of an arm's length transaction is to ensure that both ...
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  • Fair Market Value

    The price that a given property or asset would fetch in the marketplace, subject to the following conditions:1. Prospective buyers and sellers are reasonably knowledgeable about the ...
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  • Buyer's Market

    A situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations. Buyer's Market is commonly used to describe real estate markets, but it ...
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    • Exchange

      A marketplace in which securities, commodities, derivatives and other financial instruments are traded. The core function of an exchange - such as a stock exchange - is to ensure fair ...
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    • Transaction

      An agreement between a buyer and a seller for the exchange of goods or services for payment.
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    • Manipulation

      The act of artificially inflating or deflating the price of a security. In most cases, manipulation is illegal. It is much easier to manipulate the share price of smaller companies, such ...
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