A market stops being orderly when a situation gets drastically out of hand and it becomes difficult to match buyers with sellers. Prices can go into freefall, like in a stock market crash. Or they start skyrocketing, like in those situations where you suddenly need to stock up on water before the hurricane comes.
You own shares in a high-flying tech stock specializing in the development of self-driving cars. It turns out that the CEO of the firm was secretly murdering people and using their blood to fuel its vehicles. When news breaks, the stock plummets. The market for those shares cease being orderly.
On the other side of the spectrum, you have an orderly market. It's one where buyers and sellers find each other without much drama. Prices may fluctuate, but everything takes place in a calm and reasonable way. You know, a normal trip to the grocery store, or your average day on Wall Street.
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Finance: What is an Auction Market?13 Views
Finance a la shmoop... what is an auction market.. next up on the block [Man speaking on stage]
we've got stock in the company comb Depot....
okay yeah so the New York
Stock Exchange is an auction market and you have no idea how much caffeine I had [Man holding a monster energy drink]
to have to get that right which means that the prices on the new york stock
exchange happen during a bidding process we're matching offers get you know [People frantically rushing to bid for stocks]
matched... buyers and sellers buy and sell at the
same time so in essence two transactions are happening at once the opposite of
this sort of market is the over the counter or OTC market where dealers are
the ones holding all the cards and they ultimately determine the price by [Dealer with the cards]
creating a spread from where they're willing to sell your shares and what
price they'll pay to buy your shares but in an OTC market well you don't get to [Dogs running side by side]
feel like you're watching the last leg of a greyhound race so you don't get all
my caffeinated auction talk there which is kind of cool we like that, right..right?
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