Financial Education

Continuous markets are those in which trades can occur at any time that the market is open. This can happen in one of three ways:

• An auction market, in which the trades are placed between investors without intermediaries. A trade occurs whenever the highest bid price and the lowest ask price match.
• A dealer market, in which intermediaries provide liquidity by setting minimum bid and maximum ask prices. In a dealer market, a dealer takes one side of each trade, and an investor takes the other.
• A hybrid market, in which dealers step in whenever the auction market is not sufficiently liquid.

For more information, see all articles on: Investing in Stocks, Investing in bonds, Portfolio Management, Trading Execution

See also:

Types of Securities Markets

Call Markets

Secondary Capital Markets

Pricing Rationality in China’s Stock Markets

“Best Execution”