What is a dealer versus broker market?

A dealer market is a financial market where dealers buy and sell securities for their own accounts, facilitating transactions by providing liquidity and acting as intermediaries. In contrast, a broker market involves brokers who act as agents for buyers and sellers, executing trades on their behalf without holding the securities themselves. Dealers profit from the spread between the buying and selling prices, while brokers earn commissions for their services. Both markets play essential roles in facilitating trades, but their operational structures differ significantly.