Financial Markets And Trading: Chapter 2. Modern Financial Markets - ayaohsu/Personal-Resources GitHub Wiki

US Equity Market

Market type

• Primary Market: Issuers sell the security directly to investors after IPO
• Secondary Market: Trading of the securities among the investors at exchange
• Third Market: Trading of exchange-listed securities in an OTC market

Hybrid market

• A securities exchange that facilitates trading through automated electronic trading platform and a traditional floor broker system
• NYSE becomes the first in 2007
• Research shows that average execution time has reduced from 10 s to less than 1 s by applying the hybrid market

Alternative Trading Systems

ATS are designed for direct matching buyers and sellers. They are regulated by the SEC but not registered as exchanges. ATS serve as alternative sources of liquidity and compete with exchanges for customers using lower execution latency and fees. Often times, institutional investors use an ATS to find counterparties for transactions instead of trading large blocks of shares on national stock exchanges. These actions may be designed to conceal trading from public view since ATS transactions don’t appear on national exchange order books.

Read more: Alternative Trading System (ATS) https://www.investopedia.com/terms/a/alternative-trading-system.asp#ixzz56ccG9cL2

Status: Alternative trading systems

ECN

• Clients submit their orders via an electronic network
• LOB is visible to all ECN clients (usually anonymous)