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Finance: What is an Auction Market? 13 Views

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Description:

What is an Auction Market? Auction markets are the common stock exchanges. They allow buyers and sellers to enter bids and offers; trades occur when the highest price a buyer will pay or the lowest price a seller will take is reached.

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Transcript

00:00
Finance a la shmoop... what is an auction market.. next up on the block [Man speaking on stage]
00:07
we've got stock in the company comb Depot....
00:18
okay yeah so the New York
00:20
Stock Exchange is an auction market and you have no idea how much caffeine I had [Man holding a monster energy drink]
00:24
to have to get that right which means that the prices on the new york stock

00:28
exchange happen during a bidding process we're matching offers get you know [People frantically rushing to bid for stocks]
00:34
matched... buyers and sellers buy and sell at the
00:40
same time so in essence two transactions are happening at once the opposite of
00:45
this sort of market is the over the counter or OTC market where dealers are
00:50
the ones holding all the cards and they ultimately determine the price by [Dealer with the cards]
00:54
creating a spread from where they're willing to sell your shares and what
00:58
price they'll pay to buy your shares but in an OTC market well you don't get to [Dogs running side by side]
01:03
feel like you're watching the last leg of a greyhound race so you don't get all
01:06
my caffeinated auction talk there which is kind of cool we like that, right..right?
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