Upstairs Market

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DEFINITION of 'Upstairs Market'

The trading of securities, such as stocks, that occurs within a broker-dealer firm instead of at an exchange, such as a stock exchange, or between two broker-dealers in the over-the-counter (OTC) market. In an upstairs market transaction, the broker-dealer typically represents both parties (buyer and seller).

INVESTOPEDIA EXPLAINS 'Upstairs Market'

An upstairs market exists when trading occurs within a broker-dealer firm and not through a regular exchange such as a stock exchange. The Securities and Exchange Commission (SEC) prohibits this type of trading activity if the prices given to customers are less favorable than the prices available to customers in the general market.

RELATED TERMS
  1. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  2. Broker-Dealer

    A person or firm in the business of buying and selling securities, ...
  3. Full-Service Broker

    A broker that provides a large variety of services to its clients, ...
  4. National Association Of Securities ...

    The NASD was a self-regulatory organization of the securities ...
  5. Over-The-Counter - OTC

    A security traded in some context other than on a formal exchange ...
  6. Discretionary Investment Management

    A form of investment management in which buy and sell decisions ...
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