What is a ‘Dealer’

A dealer is a person or firm in the business of buying and selling securities for their own account, whether through a broker or otherwise. A dealer is defined by the fact that it acts as principal in trading for its own account, as opposed to a broker who acts as an agent in executing orders on behalf of its clients. A dealer is also distinct from a trader in that buying and selling securities is part of its regular business, while a trader buys and sells securities for his or her own account but not on a business basis.

Explaining ‘Dealer’

While “dealer” is a separate registration category in the U.S., in Canada the term is used as the shortened version of “investment dealer,” which is the equivalent of a broker-dealer in the U.S.

Further Reading

  • Optimal dealer pricing under transactions and return uncertainty – [PDF]
  • What financing data reveal about dealer leverage – [PDF]
  • The federal reserve's primary dealer credit facility – [PDF]
  • The failure mechanics of dealer banks – [PDF]
  • Structural organization of secondary markets: Clearing frequency, dealer activity and liquidity risk – [PDF]
  • On dealer markets under competition – [PDF]
  • Dealer behavior and trading systems in foreign exchange markets – [PDF]
  • … of dealer credit terms related to securities financing and OTC derivatives: some initial results from the new Senior Credit Officer Opinion Survey on Dealer Financing … – [PDF]
  • Optimal dealer pricing under transaction uncertainty – [PDF]