DEFINITION of 'Interdealer Market'
A trading market that is typically only accessible by banks and financial institutions. The interdealer market is an over-the-counter market that is not restricted to a physical location; rather, it is a global market where representatives of banks and financial institutions execute trades through their trading terminals.
BREAKING DOWN 'Interdealer Market'
The foreign exchange interdealer market is one of the better-known interdealer markets and is characterized by large transaction sizes and tight bid/ask spreads. Currency transactions in the interdealer market can be either speculative - initiated with the sole intention of profiting from a currency move - or customer-driven (by an institution's corporate clients such as exporters and importers, for example).