What are the different types of market?
A market is a venue of exchange. This includes markets for products, services, capital, land, assets, investments and labor. The following are common types of market. A mostly theoretical type of market where supply and demand are in perfect equilibrium. This is efficient as it maximizes the value, also known as utility, delivered to consumers.
Which type of market is the most liquid?
Of the three types of markets, the dealer market is usually the most liquid. A broker market operates by finding a counterparty to both buyers and sellers. When dealers act as the counterparty, the delay with brokers finding an appropriate counterparty results in less liquidity in brokered markets. Traditionally, stock markets were brokered.
What is the most automated market?
Of the three types of markets, the exchange is the most automated, however, if no buyers and sellers are able to meet in terms of price, no trades execute. The stock market is no longer a brokered market, having transitioned to being an automated exchange. Trades are executed based on order books that match buyers with sellers.