WhatsApp us

my homework help logo
Profile Image
Chat with support

Market Institutions Related To Equity: An Overview

Need a hand with your homework? Get expert help now and smash those grades! 💯 Submit your assignment today!

100% human expertise, no AI. 🤖

  • Experienced Tutors
  • On-Time Delivery
  • Plagiarism-Free Work
myhomeworkhelp reviews
Order Homework Help From Experts
Please enable JavaScript in your browser to complete this form.
Please enter the details of your homework requirements.
What should we call you?
Zero spam guarantee.
For order updates only.

Hire Best Homework Helpers

MyHomeworkHelp is proud to work with a team of expert professionals with verified academic credentials, selected for their proven skills in their field of study.

Confidently hire experts from the top universities across the globe.

Benefits & Assurances

subjects covered

All Subjects Covered

subjects covered

Refund Guarantee

subjects covered

Experienced Tutors

subjects covered

Unlimited Revisions

subjects covered

On Time Delivery

subjects covered

Chat With Expert

Let us have a glance at equity trading’s international arrangements. From a corporate point of view, stocks are after all more interesting in comparison to several other financial options like a foreign government bond, despite there being less money in corporate equity than in foreign government bond. Furthermore, non-equity financial markets might offer more money, but the investment’s subject area is focused on stocks (equities) since easier for retail investors to participate. Also, stocks data comes by comparatively easily. Therefore, it is sensible to explain certain institutional details how stocks and investors connect, i.e., exchange claims for cash and contrariwise.

7.2A Brokers

It is a retail broker with whom majority of individuals put orders for buying or selling stocks. For example, Ameritrade, Merrill Lunch, and Charles Schwab, who are a deep discount, full service and discount broker respectively? The commission of discount brokers might be just $10 for every trade, but they also get rebate payments from concerned market maker.  This is known as payment for order flow.

In turn, market maker recovers this payment with execution of your trade at a less conducive price. Even though it might seem that an arrangement like this might have a purpose of deceit, it is evidently suggested that discount brokers still serve as a cheaper option to facilitate investor trades, particularly investor trades that are small, despite taking into consideration the hidden payment involved.

Simply put, they are not actually as cheap as you would be led to believing. Either limits orders, which require execution if price is below or above a limit specified by the investor, or market orders, which require execution at the present price, can be placed.

Different order modifications also exist, such as stop-loss orders, which requires the broker for selling a security if a specific amount is lost, fill-or-kill orders, and good-til-canceled orders. Then, handling execution of trades is the retail brokers’ primary function. It is generally done by routing the orders of investors to a central trading location such as a stock exchange.

Choosing location and agencies engaged in executing the trade is typically done at discretion of the retail broker. Retail broker’s second function is keeping a track of the holdings, facilitating the purchase on margin (by means of which investors may borrow money for purchasing stock. This allows them to buy more securities in comparison to what is affordable for them on the basis of pure cash and facilitating selling securities by shorting. Again this lets investors make speculations on going down of stocks.

Several big institutional investors separate These two functions. They employ their own traders, whereas the brokers are only responsible for taking care of portfolio’s bookkeeping, shorting provisions and margin provisions of the investor. Such brokers with limited functionality are known as prime brokers.

How Does Shorting Stock Work?

You would like to short a stock if you wish to make speculations that the particular stock shall go down. Your broker shall arrange this shorting. It is very important, which is why it requires a more detailed description:

  • From getting hold of an investor from whom you can borrow the shares. Ideally, this doesn’t cost anything, but in reality, the brokers have to find investors who are willing to lend. For helping you in facilitation of your short sale, both the lender and broker generally earn some basis points on a yearly basis.
  • After borrowing, you sell the shares to someone who is willing to purchase the shares. Ideally, you would earn the interest on the proceeds you would keep. However, in reality, you may be forced by your broker on putting these proceeds into safe bonds with low yields. In case of small retail investors, the brokerage firm might even altogether keep the proceeds.
  • When you wish your short to unwind, you need to buy the shares again and then return to the lender.

For instance, if the shares traded for $50 when you borrowed them and they sell now for $30, now you may buy them again for $20 less, which is a profit for you. Effectively, in a perfect world, your role can be considered to be similar to the role of the company. You may issue the shares and then use the proceeds from $50 for funding your investments. However, transaction costs have to be taken into account in reality.


Q7.10 What primary functions do brokerage firms perform?

Q7.11 What is the difference between a retail broker and a prime broker?

Q7.12 For shorting a stock, is the return rate higher in a real world or an ideal world? Why so?

7.2B Exchanges and Non-Exchanges

Your transaction is routed to central trading location by a retail broker. Exchanges are most prominent of all. Being a central trading location, trading of financial securities is done in an exchange. In the U.S., two stock exchanges that are the most important are NYSE (New York Stock Exchange), also called the Big Board, and NASDAQ or National Association of Securities Dealers Automated Quotation System.

This NYSE exclusively was auction market once, in which the process of auction was managed by a specialist who as designated for every stock. The specialists trade with brokers on floor of exchange. Often, this specialist served as a monopolist. Now, most of the trading on the NYSE are conducted electronically.

In contradiction to the hybrid process involving both electronic and human mainly at the Wall Street, NASDAQ always functions as a completely electronic exchange with no specialists. For the sake of security, the location, or rather the computer system’s location of NASDAQ is kept secret. There is a minimum of one market maker for every NASDAQ stock. A broker or dealer also exists, who has consented on continuously standing by for offering to electronically sell or buy shares, thus forming an immediate and a liquid market for general public.

Furthermore, for offering liquidity, market makers get paid. Additional rebates are received by them when an ask, or a bid posted by them is executed. There are several market makers associated with most stocks on NASDAQ. These market makers are from around 500 trading firms like E*Trade or J.P. Morgan. The advantage of market makers over general public is that they can view limit order book, consisting of currently unexecuted orders for purchasing or selling if there is a change in the price of the stock.

This provides them with a reasonable idea about the price at which several of the selling or buying activity shall occur. Being older exchange, NYSE is a biggest exchange to trade most ‘blue chip’ stocks. (The term ‘blue chip’ comes from poker, wherein the blue chips were of the highest denomination. Now, it means serious and well-established).

NYSE listed nearly 3000 companies worth nearly $25 trillion in 2006. Usually, NASDAQ trades high-technology and smaller firms. It also lists nearly the same number of firms and also has comparatively more trading activity in comparison to NYSE. Certain stocks are traded both on NYSE and NASDAQ.

Trading whenever investor wishes to execute is known as continuous trading. It depends on standby intermediaries (market makers or specialists) being present. When everyone else is unavailable, these intermediaries can absorb shares. There is a risk involved, which is why intermediaries must get a good return rate for doing so.

For avoiding such a cost, exchanges have been organized by a few countries into auction systems that are discontinuous. These systems match the sell and buy orders twice a day. There is a disadvantage: it is not possible to immediately execute orders. Instead, delaying is must until there is an accumulation of a range of sell orders and buy orders. The fact that the expense of an intermediary is eliminated serves as the advantage. Therefore, usually, auctions have slower execution but also offer lower trading costs.

Change and innovation are omnipresent, also in the U.S. For instance, ECNs (electronic communication networks) have made huge changes in trading business by replacing exchanges, particularly for big institutional trades. (The same stock traded by exchanges is traded by them, thus allowing them to compete with exchange as far as execution speed and cost are concerned.)

The specialist is eliminated by an ECN, which allows investors in posting orders that are price-contingent themselves. ECNs can specialize in faster execution, higher broker kickbacks or lower costs of execution. Instinet and Archipelago are the biggest ECNs. Archipelago merged with NYSE and Instinet was purchased by NASDAQ in 2005. (Keeping track of trading arrangements is difficult. For instance, NYSE, in 2006, even had mergence with ArcaEx, which also an electronic trading system. It also merged with a Paris-based stock exchange named Euro next, which is pan-European. Currently, it is known as NYSE Euronext.)

Crossing systems like POSTIT of ITG is another method of buying and trading stocks that is even more intriguing. ITG mainly focuses on matching of huge institutional trades like an auction. The order simply may not be executed if a match is not found. On the other hand, in case a there is a match, execution is way cheaper in comparison to exchange as a market maker, or specialist is eliminated.

More interesting trading places have come up in recent times. For instance, like original Napster, peer-to-peer networking is used by Liquidnet for real time matching of sellers and buyers. Worldwide, electronic limit order books and ECNs are the major trading system nowadays for equities. With United States exchange floors being the only holdouts. Computer programs and similar exchanges are even used for trading currencies, futures, bonds and derivatives.

Other different financial markets exist as well. Financial exchanges exist for handling insurance contracts, commodities, stock options, and on and on. The OTC (over-the-counter) markets are a huge segment. OTC means calling around to certain well-known traders until you get hold of someone wanting to sell or buy at price of your liking. Most transactions of bonds remain over-the-counter, even though fast institutional change is taking place.

In terms of dollar amounts, a lot more trading of bonds is handled by OTC markets as compared to bond exchanges. However, for retail investors, the transaction prices for OTC are extremely high. If you don’t have much knowledge of the market and call, you might be quoted an unreasonably high price. The National Association of Securities Dealers (NASD) also runs a semi-OTC market for smaller firm stocks listed on pink sheets. It is on the local national exchanges where foreign securities are traded.

Costs for retail investors of U.S are usually very high, which is why direct participation is not worth while.

Solve Them!

Q7.13 What is the difference between electronic exchange and crossing system?

Q7.14  What is a market maker and specialist? What advantages are offered by them, as far as trading is concerned?

Q7.15 Explain a few trading on main stock exchanges alternatives.

7.2C Investment Vehicles and Companies

A lot of investment vehicles active in the financial markets of the United States are regulated by the SEC. Under 1940’s Investment Company Act, there exist three kinds of asset companies: closed-end funds, open-end funds, and UITs.

Open-end is synonymous with mutual fund in the U.S. In other places; other classes might be included in mutual funds. The meaning of open end is that shares can be created by the fund at will. The fund shares can also be redeemed by investor at each trading day’s end in return of net asset value or the NAV, which should be posted every day. With this, investors have hardly any reasons for selling shares to others, which is why mutual fund doesn’t trade on exchanges. A lot of bite is provided top the law of one price by redemption right. The worth of fund shares is always almost exactly the worth of the underlying holdings.

If the share price of an open-end fund falls way below its holding’s value, fund shares could be bought and redeemed by an arbitrageur, thus earning him free money. (There is a discrepancy because of certain unusual complications with tax: the capital losses and gains of the fund are passed to the investors at each year’s end, although they mayn’t be what were experienced by every investor. In the U.S financial market, interestingly enough, the number of mutual funds are more in comparison to stocks.

As far as closed-end fund is concerned, there is a singly huge major offering of the fund shares. These shares can’t be redeemed by investors for their underlying value. Advantage associated with such a fund is it can invest itself in less liquid assets. That is because it cannot be obligated to sell its handling according to the will of its investors.

A lot of closed-end funds are traded on exchange, which allows an investor to resell shares in case they require cash. The disadvantage lies in the fact that there is much less bite associated with the law of one price. Averagely, closed-end funds are traded way below their underlying holdings’ value, about in line with the usually high fees charged by the managers of these funds.

Managers of both closed-end and mutual funds are allowed to actively trade their holdings, and a lot of them even do so. Even though some funds imitate the common indexes of stock market, a lot more try guessing the market. Most of funds are categorized depending on the motivation of general trading (for example, market timing, growth, value, income, or capital appreciation).

A UIT (unit investment trust) is kind of closed end when it comes to its creation (generally through a singly huge major offering) and kind of open as far as its policies for redemption are concerned (generally redemption requests from investors are accepted.) Furthermore, it is forbidden by SEC rules ton actively trade UITs (that shall change soon) and there must be a certain date for termination with UITs (even if it’s in future of 50 years.)

Buying and selling UITs is easier for retail investors as they can be listed on stock exchange. Certain early ETFs (exchange-traded funds were structured as UITs; however, some additional legal contortions were required that helped them in creating more shares on demand. Nowadays, ETFs are generally structured like open-end funds.

SEC also regulates certain other investment vehicles under other rules. The most major may be some kinds of ADR (American Depositary Receipt.) Being an investment vehicle that is passive, an ADR generally owns only on foreign security’s stock, which is held usually in escrow at the Bank of New York. An ADR makes trading foreign securities simpler for retail investors of U.S with no big transaction costs incurred. A great bite is given to the law of one price since ADRs can be redeemed.

There are even structured funds so they don’t have to be registered with SEC. Thus, they cannot advertise openly for investors and limited to less than a hundred investors. It includes venture capital funds, hedge funds and private equity funds. Several offshore funds are made for helping foreign investors in holding stocks with no imposing of SEC regulation and also without getting into vicinity of U.S. IRS.

7.2D Appearance and Disappearance of Securities


Most of the equities traded publicly come out on public exchanges, usually NASDAQ, through IPOs (initial public offerings.) It is an even in which the companies that are privately traded first sell shares to institutional investors and ordinary retail. It is usually the underwriters who execute IPOs. There are accustomed with the regulatory process and complex legal and have access to client investor base for buying the shares that are newly issued. Typically, shares are sold in IPOs at a specific price: for nearly 10% below the likely price at which it is likely that they will trade on after-market open trading’s first day. (A lot of shares of IPO are assigned to the favorite customers of the brokerage firm as they can serve as a great profit source.

Generally, nearly one-third of company is sold in IP and the worth of typical shares offered by IPO is in the range from $20 million to $100 million, though some are a lot bigger. Nearly two-third of such companies do not amount to a lot or die in a year or two. The remaining one-third thereafter soon offers more shares in SEOs (seasoned equity offerings.) Nowadays, the increase in number of shares in the companies that are publicly traded, particularly the larger companies, comes from employee stock option plans rather than seasoned equity offerings. Eventually, these turn out to be unrestricted shares that are publicly traded.

Since legal regulations faced by IPOs are complex, there has recently been an increase in the prominence of reverse mergers’ alternative. With reverse merger, privately-owned large company wanting to go public is merged with small company that is already traded publicly. The big company’s owners get shares that are newly issued in combined entity. Obviously, whenever a company that is publicly traded purchases assets like a privately held company, it effectively means that the capital is being deployed into public markets from private sector.

In 1933/34, the SEC (Securities and Exchange Commission) was stablished by Congress through Securities Exchange Acts. Further, through 1940’s Investment Advisers Act, it regulated investment advisors. Apart from the regulation of IPO process, what a publicly traded company must do is also prescribed by them.

For example, companies that are traded publicly must report financials regularly to SEC along with other information. Furthermore, insider trading is prohibited on specific information that is unreleased. However, general insiders trading are legal. Only civil fines can be pursued by the SEC. Pursuing criminal sanctions is in the hands of the states, which they usually do in a simultaneous manner. Other regulations that have to be followed by publicly traded companies are derived from state laws and federal laws.


Links of Previous Main Topic:-

Links of Next Financial Accounting Topics:-

Your Price: $15.00 $13.99 🔥

Pricing may change based on requirements

Get Homework Help In

Maths and Statistics


Humanities & Arts


Essay Writing

How Our Homework Service Works

FAQ number 1

Share your requirements

FAQ number 2

Make secure payment

FAQ number 3

Get homework answers

FAQ - Our Homework Help Services

We have put together some commonly asked questions.


Is there a website that can do my homework?

Yes, if you are looking for such a site, MyHomeworkHelp is one of the leading homework help websites that can do your homework and assist with various academic needs. Here's all you need to know about our team and how they provide flawless homework help.

If you find yourself thinking, "I need to pay someone to do my homework," our team is ready to assist. It's common for students to seek help with their homework, and our experts are prepared to provide personalized support tailored to your needs.

You can visit www.myhomeworkhelp.com to get all types of homework-related help from our experts.


What is the best homework help website?

The best homework help website enhances students' experience of getting homework assistance from experts. MyHomeworkHelp, recognized as one of the best online homework help platforms, serves as both a guide and a solution provider for students. We've been rocking the homework help scene since 2012, assisting over 20k students, and we must be doing something right because more than 70% of them keep coming back for more. Whether you need help understanding concepts, completing assignments, or getting your homework done, MyHomeworkHelp is here to support your academic journey as the best college homework website.


How can I get help with my homework?

1. Tell us your homework details

To get started with online homework help, simply choose the type of homework assistance you need. When filling out the order form, make sure to provide detailed instructions, including the deadline, number of pages, grading rubric, and any other relevant information.

2. Confirm your order

Review the details of your homework order and proceed to make a secure payment using VISA, Mastercard, or PayPal. Once the payment is processed, our experts will begin working on your homework immediately.

3. Receive your order

The completed homework will be delivered directly to your email. This ensures that students receive their homework assistance on time and can meet their academic requirements without stress.


Do you guarantee plagiarism-free homework answers?

We take academic integrity very seriously and understand the importance of providing homework answers free of plagiarism. Our tutors are committed to delivering original and unique content for every assignment. Here are the steps we take to ensure your homework is plagiarism-free:

  1. Original Work: Each assignment is completed from scratch based on your specific requirements and guidelines.
  2. Expert Tutors: Our tutors are highly qualified and experienced in their respective fields, ensuring the work they produce is both original and high-quality.
  3. Plagiarism Detection: We use advanced plagiarism detection software to scan every assignment before delivery. This ensures that the content is unique and free of any copied material.
  4. No AI Usage: We guarantee that all work is 100% human-crafted expertise, with no AI-generated content involved. This ensures the authenticity and quality of the work provided.
  5. Quality Assurance: Our quality assurance team reviews each assignment for originality and adherence to academic standards before it is sent to you.

By following these stringent measures, we guarantee that the homework answers you receive are completely free of plagiarism and AI involvement. You can trust us to provide you with original and high-quality academic assistance.

For more information on our guarantees, please visit our guarantees page.


Is your homework service confidential?

Absolutely! Confidentiality is one of the basic guarantees of our service at MyHomeworkHelp.com.

When our customers make their homework orders, they know their information remains 100% confidential.

Even your homework writer will not be provided with your personal details. So, when you hire a professional homework helper on our website, rest assured that your information will remain private and safe.

For a comprehensive understanding of how we protect your privacy, please refer to our Privacy Policy.


How much do I need to pay to get my homework done?

We do not have monthly fees or minimum payments for our services. Each homework assignment is quoted a unique price, based on the tutor’s estimate of the time required to complete your work. There are no obligations, and you are free to discuss the price quote with the tutor.

When you decide to pay someone to do my homework, our pricing starts at $13.99 per page. The final pricing depends on various factors including the page count, deadline, nature of the task, and the homework writer’s level of expertise.

We offer flexible payment options, allowing you to make a partial payment to start working on your assignment and pay the remaining amount upon completion. This ensures no pressure of up-front payment and no hidden order costs.

Our dynamic pricing model takes into account the type of assignment, its urgency, and the complexity of the task. For instance, shorter deadlines and more complex assignments may increase the price. You can get an instant quote by selecting your assignment type, deadline, and page count on our website.

Get the help with your homework at competitive rates, tailored to your specific needs and deadlines. For more detailed information on pricing, please visit our pricing page.


Who are the experts who will help me with my homework?

We work with subject experts from all over the world. We hire them with the help of complex tests in the disciplines of their expertise. We also verify the IDs and academic transcripts of our homework writers to be sure that our experts have a bachelor's or master’s or a PhD degree. This is how we can be sure of the proficiency of our panel of experts who will help you with your homework. Here's all you need to know about our team and how they provide flawless homework help.

  1. Our team comprises top-tier homework helpers who excel in addressing and resolving questions on various topics. Each tutor effectively utilizes their expertise to concentrate on the core subject matter and thoroughly analyze it.
  2. Our professional tutors specifically craft each assignment tailored to students' requirements, including preferred formats, citation styles, and essential elements.
  3. Whether it’s coursework, dissertations, essays, or case studies, our platform guarantees timely college homework help across a wide range of academic papers. Don’t hesitate any longer; connect with our tutors when you seek help with your homework for perfect assignment solutions and improved grades.


Can I chat with my homework helper for updates?

Yes, you can certainly chat with your homework helper on our secure chatboard platform. MyHomeworkHelp.com provides a direct communication channel between you and your assigned expert (while maintaining privacy). This feature allows you to ask questions, clarify instructions, and provide additional information about your homework order to ensure that the help you receive is tailored to your specific needs.

You'll be notified by email whenever there are new messages for you, but we advise regularly checking your personal page to ensure no critical updates from your writer are overlooked.

Should you have an urgent matter to address, do not hesitate to contact the support team for assistance. This system ensures that students can stay updated on their homework paper progress and maintain clear communication with their experts.


What makes you the best homework helper?

MyHomeworkHelp is ranked as one of the best online homework helpers, providing exceptional support to students. We've been excelling in the homework assistance arena since 2012, assisting over 200k students, and consistently achieving high satisfaction rates, with more than 70% of our students returning for additional help. But do not take our word for it! See our independent reviews on google, facebook, sitejabber, and on Trustpilot. For all collated reviews, see here

We ensure our prices remain competitive and offer attractive discounts to make our services accessible. Our commitment to delivering plagiarism-free solutions guarantees the integrity and originality of your assignments. These attributes, combined with our dedication to personalized support and timely delivery, establish MyHomeworkHelp as the premier homework helper for all your academic needs.


How will I receive my homework order?

You'll receive the initial version of your paper as a secure, non-editable PDF within your specified deadline. This allows you to review the content and decide if any revisions or edits are required. Our homework service will refine the homework paper based on your feedback.

Should the document meet your expectations and not require any changes, you can simply approve the order and access the editable Word .doc file.