How Canadian Markets Work

Episode 4: Auction Markets and Dealer Markets

Hosts: John and Jane Runtime: 20 Minutes

Episode Summary Jane notices a frustrating difference between her stock and bond trades: one is transparent and competitive, while the other feels like a "take it or leave it" quote. John explains that this isn't a flaw in her brokerage, but a fundamental structural difference between Auction Markets and Dealer Markets. This episode demystifies how prices are set, why bonds are traded "over-the-counter," and why the "spread" is a hidden fee that most investors never see on a statement.

Key Concepts

• Auction Markets (Stocks): Buyers and sellers compete  ...