Centralized Market

DEFINITION of 'Centralized Market'

A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.

BREAKING DOWN 'Centralized Market'

The New York Stock Exchange is considered a centralized market because orders are routed to the exchange and are then matched with an offsetting order. On the other hand, the foreign exchange market is not deemed to be centralized because there is no one location where currencies are traded and it is possible for traders to find competing rates from various dealers from around the world.

RELATED TERMS
  1. Currency Exchange

    A business that allows customers to exchange one currency for ...
  2. Adjustment

    The use of mechanisms by a central bank to influence a home currency's ...
  3. Graduated Security

    An equity security that has moved its listing from one stock ...
  4. Equity Market

    The market in which shares are issued and traded, either through ...
  5. Regional Stock Exchange

    A place outside of a country's primary financial center where ...
  6. International Currency Exchange ...

    The rate at which two currencies in the market can be exchanged. ...
Related Articles
  1. Investing

    Stock Exchanges Around The World

    We tell you about five of the most popular stock exchanges from around the globe.
  2. Markets

    Who Owns The Stock Exchanges?

    As M&A heats up among the exchanges, here's how the market currently looks.
  3. Markets

    Stock Exchanges: A Global Tour

    Check out the history and inner workings of the world's six most well-known stock exchanges.
  4. Markets

    Macroeconomics: Currency

    By Stephen Simpson For citizens of different countries to conduct trade, they have to buy and sell each other's currencies. The price of a nation's currency, expressed as an amount of a second ...
  5. Trading

    Forex Market Basics

    The foreign exchange market is a market where participants buy, sell, and exchange trillions of dollars worth of currencies daily. Learn the basics of the FX market.
  6. Investing

    Here's How You Calculate An Exchange Rate

    Struggling to get a grasp on exchange rates? Here's what you need to know.
  7. Investing

    Explaining Fixed Exchange Rates

    A government using a fixed exchange rate has linked the value of its currency to the value of another country’s currency, or the price of gold.
  8. Trading

    The Currency Market Information Edge

    Unique features of the forex market may allow larger players to get a jump on smaller ones.
  9. Personal Finance

    The Worst Place to Exchange Currency

    Exchanging currency is a necessary part of traveling, but not all currency exchanges are created equal.
  10. Investing

    Why You Should Understand The Stock Market

    Even if you don't invest a cent in stocks, you should still understand how the stock market works. Find out why.
RELATED FAQS
  1. What exactly is being done when shares are bought and sold?

    Most stocks are traded on physical or virtual exchanges. The New York Stock Exchange (NYSE), for example, is a physical exchange ... Read Answer >>
  2. What are the rules behind the delisting of a stock?

    The criteria to remain listed on an exchange differs from one exchange to another. On the New York Stock Exchange (NYSE), ... Read Answer >>
  3. What are all of the securities markets in the U.S.A?

    There are three major U.S. financial securities markets which are: New York Stock Exchange (NYSE): NYSE is a stock exchange ... Read Answer >>
  4. What are the regulations surrounding limit order protection?

    Learn about the order protection rule enacted by the Securities and Exchange Commission (SEC) to ensure investors receive ... Read Answer >>
  5. How do I set a strike price in foreign exchange trading?

    Learn about the different order types foreign exchange traders can use to manage positions at certain strike prices and how ... Read Answer >>
  6. Why do option volume quotes differ on different websites?

    Option quotes are different in price and in volume because identical options can trade on more than one market or exchange. ... Read Answer >>
Hot Definitions
  1. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  2. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  3. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  4. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  5. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  6. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
Trading Center