BROKERED MARKET Meaning and
Definition
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A brokered market refers to a type of financial market where intermediaries or brokers facilitate the buying and selling of securities or other financial instruments. In a brokered market, individual investors or institutions rely on brokers to connect them with potential counterparties for their trading needs. The brokers act as facilitators and play a crucial role in matching buyers and sellers and executing trades on behalf of their clients.
Unlike an exchange market where trades take place on a centralized platform, a brokered market operates through a decentralized network of brokers. These brokers maintain relationships with multiple buyers and sellers, allowing them to efficiently connect parties interested in trading securities. They provide valuable expertise and guidance to their clients, such as analyzing market trends, pricing securities, and ensuring fair and transparent transactions.
Brokered markets are commonly found in the over-the-counter market, where securities that do not meet regulatory requirements for listing on an exchange are traded. Examples of products commonly traded in brokered markets include bonds, derivatives, foreign currencies, and private placements. Brokered markets can also exist within organized exchanges, especially for larger or more complex transactions.
In summary, a brokered market is a financial market where intermediaries or brokers facilitate the buying and selling of various securities and other financial instruments. These brokers play a vital role in connecting buyers and sellers, executing trades, and providing expertise and guidance to their clients.
Etymology of BROKERED MARKET
The etymology of the word "brokered market" can be understood by examining the origins of its constituent parts.
1. Broker: The word "broker" dates back to the 14th century and is derived from the Anglo-French word "brocour" or "brocourte", which means "small trader" or "middleman". It further traces its roots to the Old French word "brocheor", meaning "wine retailer" or "tapster". Eventually, the term broadened its meaning to encompass various types of intermediaries who facilitate transactions between buyers and sellers.
2. Market: The word "market" comes from the Latin word "mercatus", meaning "trading" or "buying/selling". Its usage in Old English denoted a gathering of people for the purpose of buying and selling goods.
