Market Structure

What is a Market?

A market allows buyers and sellers to find goods and services and carry out an exchange. A market is formed when a buyer and seller are interested in making a "trade" or transaction.

There are two types of markets.

  • Order driven markets
  • Quote driven markets

Most markets are implemented to suit a variety of buyers and sellers under variuos circumstances. In these cases, market is a mixture of quote-driven and order-driven markets. To perform a trade, markets provide trade processes and trade context processes.

Trade processes - search, pricing, logistics, authentication, payment and settlement.
Trade related processes - product representation, regulation, risk management, influence and dispute resolution.

Apart from the buyer and seller, a market may consist of other components.

Market components - buyer, seller, broker, dealer, exchange, clearing house, custodian, regulatory bodies.

Examples of Markets