Open Market

What is an 'Open Market'

An open market is an economic system with no barriers to free market activity. An open market is characterized by the absence of tariffs, taxes, licensing requirements, subsidies, unionization and any other regulations or practices that interfere with the natural functioning of the free market. Anyone can participate in an open market. There may be competitive barriers to entry, but there are no regulatory barriers to entry.

BREAKING DOWN 'Open Market'

An open market is the opposite of a closed market - that is, a market one with a prohibitive number of regulations restricting free market activity. Most markets are neither truly open nor truly closed, but fall on a continuum somewhere between the two extremes. The United States would be considered to have a relatively open market, while North Korea would be considered to have a relatively closed market.

RELATED TERMS
  1. Barriers To Entry

    The existence of high start-up costs or other obstacles that ...
  2. Free Market

    A market economy based on supply and demand with little or no ...
  3. Commercial Policy

    The regulations and policies that determine how a country conducts ...
  4. Free Trade Area

    A group of countries that invoke little or no price control in ...
  5. Balanced Trade

    A condition in which an economy runs neither a trade surplus ...
  6. Free Trade

    The unrestricted purchase and sale of goods and services between ...
Related Articles
  1. Economics

    What are Barriers to Entry?

    A barrier to entry is any obstacle that restricts or impedes a company’s efforts to enter an industry.
  2. Economics

    Tariffs

    Tariffs, or customs duties, are taxes imposed on foreign goods and services. In addition to providing a country with additional revenue, tariffs offer protection to domestic producers. Imported ...
  3. Retirement

    The U.S. And China Play Chicken With Other People's Money

    What do the newly-introduced tariffs mean to the average investor?
  4. Economics

    Understanding a Free Market Economy

    Why would we want a free market economy?
  5. Insurance

    Free Markets: What's The Cost?

    Some argue that when the free market fails to protect consumers, government regulation is required.
  6. Economics

    Macroeconomics: Economic Systems

    By Stephen Simpson Within the study of macroeconomics, there are certain basic goals for economic systems. Generally speaking, desirable goals include economic growth, full employment, economic ...
  7. Options & Futures

    Intro To Open Interest In The Futures Market

    Applied primarily to the futures market, this indicator confirms trends and reversals.
  8. Economics

    Understanding Free Trade

    Free trade exists when nations can swap goods and services without the constraints of tariffs, duties or quotas.
  9. Investing News

    Target Fires First Shot in Holiday Wars at Wal-Mart

    In a move that has threatened retail giant WalMart (WMT), Target (TGT) has announced that it will offer free shipping and returns on purchases made November 1 through Christmas Day.
  10. Economics

    Unions: Do They Help Or Hurt Workers?

    Learn the pros and cons of these organizations and how they fit into today's economy.
RELATED FAQS
  1. How are subsidies justifiable in a free market system?

    Learn some of the arguments in favor of or against providing subsidies in a market economy, including economic and political ... Read Answer >>
  2. How strong are the barriers to entry in the oil and gas sector?

    Learn what a barrier to entry is and how it helps existing companies. Understand the strength of barriers to entry in the ... Read Answer >>
  3. How do tariffs protect domestic industries?

    Understand the four ways tariffs are used by domestic government to protect its domestic industries. Learn how tariffs are ... Read Answer >>
  4. What is the difference between a capitalist system and a free market system?

    Learn about capitalist and free market systems, how these economic systems function and the main difference between capitalism ... Read Answer >>
  5. How does a government decide what industries to subsidize?

    Learn about the political, economic and developmental arguments in favor of providing public subsidies to industries. Read Answer >>
  6. What are the ethical arguments against government subsidies to companies like Tesla?

    Learn about the ethical argument behind government subsidies. Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center