Negotiated Market


DEFINITION of 'Negotiated Market'

A type of secondary market exchange in which the prices of each security are bargained out between buyers and sellers. In a negotiated market there are no market-makers or order matching, instead buyers and sellers actively negotiate on the price at which a transaction is finalized either directly or through the use of brokers. These markets are considered very inefficient as the time, effort and lack of transparency in pricing are large issues to be dealt with.

BREAKING DOWN 'Negotiated Market'

Negotiated markets exist and function via the basic principle of supply and demand. Buyers produce demand for a given security or asset by entering bid orders to buy the security at a specified amount and price, while sellers create the supply for the security by entering ask orders, again for set amounts and prices.

  1. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  2. Broker-Dealer

    A person or firm in the business of buying and selling securities, ...
  3. Specialist

    A member of an exchange who acts as the market maker to facilitate ...
  4. New York Stock Exchange - NYSE

    A stock exchange based in New York City, which is considered ...
  5. Over-The-Counter Bulletin Board ...

    A regulated electronic trading service offered by the National ...
  6. Secondary Market

    A market where investors purchase securities or assets from other ...
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