Inter-Dealer Broker

DEFINITION of 'Inter-Dealer Broker'

1. A brokerage firm operating in the bond or OTC derivatives market that acts as an intermediary between major dealers to facilitate inter-dealer trades.

2. A member of the London Stock Exchange who is only permitted to deal with market makers, rather than the public.

BREAKING DOWN 'Inter-Dealer Broker'

Inter-dealer brokerages operate on very small spreads, but they handle extremely large transactions.