Dealer function

A market needs to have two prices. A dealer makes the market by creating the inside spread, the spread that appears as “the market”. The dealer collects the inside spread. And crosses the outside spread. The dealer model of providing liquidity is very different from the lender model. In the dealer model, the dealer function provides Agents with the capacity to demand to transact or to transact in desired directions at desired times. The dealer is that whom/which accommodates the demand to transact without demanding it itself.

Last updated