PRINCIPAL MARKET

Principal Market Trading and Dealing Mechanism

Principal Market Trading and Dealing Mechanism

Introduction

Principal market is the main market where the trading of securities has been performed such as the blue chips companies will prefer to list principal market in stock exchange due to large exchange with large volume trading has been done.

Discussion

The mechanism has defied the event that we label for the execution and filling and order, but actually the only constituents have relates to a term which determined preliminary agreement. Such agreement has made for settlement and the procedure will resulting transfer of funds and securities. The automatic process and routine for traders deals with concern for traders seldom, and it is quite necessary that the requirement of pre-established relationships which is possibly towards the direct and indirect intermediaries among the parties (Maximilian, 1995, p: 375). Establishment of brokerage account is neither very much expensive and might be creating a barrier for making your entry either potential seller or buyer which not much known for market previously.

The trading has been done through a broker who provides the conduit towards market or he might be played as a role of agent. This has treated a more substantial role that creates the discretion about trading needs of customers. Trading needs might include the where, when and what sort of orders to be used for trade. His relationship between the customer and broker agent generates some series problems between contracting, monitoring and enforcing.

Limit Order Market

Such order specifies the direction towards the quantity, price and direction for the share to buy or sell. This set of the order who unexecuted the system that constitutes books and the can modified or cancelled any time with order management and changes rapidly. Such types of markets have been usually transparent and the mostly widely visible towards actually potential market. The extraordinary levels of traders have currently enjoyed the recent phenomena that were relaxed and permitting visibility trading floor (Thao & Joseph, 2012, p: 600). Mechanism that priority and governs the rules which has the sequence and execution of the order. For example, is the buying price is 100, and before its execution the order price is 99. Much time the considered secondary priority. At this certain level the execution of order determine as the first in first out. Such priorities have seemed for obvious and sensible that usually not determining the relative standing of orders. Trader in this particular market will prefer for the order execution at the best availability of price. In this market the both buyer and seller directly interact and used the source of broker for conduits their orders.

Floor Markets

There is a numerous and dispersed between the sellers and buyers for representing the nominal number of brokers who are negotiate the bilateral strike and deal face to face. Such brokers have often to be called the member and the as we talked about the exchanges organized historically. The members has been performing as agents and representing he others customer order which taking the orders of ...