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Episode 4: Auction Markets and Dealer Markets | Canadian Investing
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Why can you see a stock's price but not a bond's? Because they trade in two fundamentally different kinds of market. This episode explains auction markets — where every order pools into one book and competition sets the price — and dealer markets — where a dealer quotes from their own inventory and earns the bid-ask spread.
Key takeaways:
- Auction markets: one book, transparent prices (Canadian stocks)
- Dealer markets: quotes from inventory, hidden spreads (bonds)
- The bid-ask spread as…
The skinny
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