Trades on the NYSE are generally completed by having a brokerage firm acting as a "dealer" buy securities and adding them to its inventory or selling from its inventory. The Nasdaq, on the other hand, operates as an auction market, where buyers offer to buy, and sellers to sell, and the price is negotiated on the floor of the exchange.

Question

Quizplus · Accepted Answer

The statement is false. The Nasdaq operates as a dealer market, not an auction market, where market makers buy and sell securities from their own inventory. Prices are negotiated privately between market participants, not on the exchange floor.

Trades on the NYSE Are Generally Completed by Having a Brokerage