The Securities Of A Financial Dealer

In a complex economic system financial intermediaries are needed. These intermediaries are known as the brokers and the dealers. An economy is composed of lenders and borrowers. Whether it is a household or a large corporation, a small business or a nation's government. At some point in their life they need to borrow money will occur. Likewise the need to make a profit off of surplus via interest payments will also be needed as well as taking advantage of the best forex trading.
As an economic unit starts off in life whether it is an individual or corporation they'll most likely be deficit spenders until they see a return on their hard work and build a surplus to which they will lend and collect interest payments. When it comes to matching lenders and borrowers a financial dealer is needed. A financial dealer makes their money by maintaining an inventory of securities. These securities are bought and sold to lenders and borrowers alike. The dealers bid price is the highest price it offers when purchasing a security. The ask price is the lowest price at which the dealer is willing to sell a security. The difference between the bid and ask price is known as the bid-ask spread and represents the dealers gross profit. Most dealers also function as brokers and typically specialize in a particular type of market such as the commercial paper market, bond market or equity market and sometimes provides forex trading tips.
A dealer is a specialized profession with in an economic system. In a barter system goods are traded for other goods and as an economy evolves a more complex economic system begins to form. At first precious metals are exchanged for goods and over time the precious metals have taken their current form of currency as bank notes that have little to no precious metals to back them up. In this climate a dealer is able to connect borrowers and lenders who have a large amount of money to transact. Without dealers such a financial system could not exist.