Third Market

AAA

DEFINITION of 'Third Market'

Trading by non exchange-member brokers/dealers and institutional investors of exchange-listed stocks. In other words, the third market involves exchange-listed securities that are being traded over-the-counter between brokers/dealers and large institutional investors.

INVESTOPEDIA EXPLAINS 'Third Market'

Before selling an exchange-listed security to a nonmember, a member firm must fill all limit orders on the specialist's book at the same price or higher. Typical institutional investors who take part in the third market include investment firms and pension plans.

RELATED TERMS
  1. Electronic Communication Network ...

    An electronic system that attempts to eliminate the role of a ...
  2. SEC Form ATS

    A form that is filed with the SEC as an initial operation report ...
  3. Institutional Investor

    A non-bank person or organization that trades securities in large ...
  4. Listed Security

    A financial instrument that is traded through an exchange, such ...
  5. Over-The-Counter - OTC

    A security traded in some context other than on a formal exchange ...
  6. Primary Market

    A market that issues new securities on an exchange. Companies, ...
Related Articles
  1. Options & Futures

    Getting To Know The Stock Exchanges

  2. Investing Basics

    A Look At Primary And Secondary Markets

  3. Options & Futures

    The 4 Ways To Buy And Sell Securities

  4. Investing News

    Alibaba's Top Competitors

Hot Definitions
  1. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  2. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  5. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  6. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
Trading Center