Series 24: Second Market

Second Market

The second market is a negotiated market. Traditionally, the negotiated market traded mostly in unlisted securities. Today, however, the NASDAQ and other stock exchanges trade exchange-listed securities on a negotiated basis. Unlike the auction market, which is facilitated by a single market maker, the negotiated market is created by multiple market makers who post competing bid and ask prices over a computerized network. Orders are filled either automatically, with the computer matching the best quotes first, or by private negotiation.

The second market is composed of securities that trad