Compare & contrast the several types of secondary market trading structures.
There are two fundamental types of secondary market trading structures: dealer & agency. In a dealer market, the dealer serves as market maker for the security, holding an inventory of the security. The dealer buys at his bid price and sells at his asked price from this inventory. All public trades go through the dealer. In an agency market, public trades go through the agent who matches it with another public trade. Dealer and agency both markets can be continuous trade markets, however non-continuous markets tend to be only agency markets. Over-the-counter trading, specialist markets, and automated markets are sort of continuous market trading systems. Call markets & crowd trading are each kind of non-continuous trading market systems. Continuous trading systems are wanted for actively traded issues, while call markets and crowd trading offer advantages for smaller markets with several thinly traded issues since they mitigate the possibility of sparse order flow over short time periods.