Generic term for over-the-counter trading in securities. Market participants, primarily banks and brokers, freely agree prices among themselves for each transaction. In the past, transactions were usually settled by telephone, which is why the term is still used today. – Today, the transactions are carried out via screens and computers. Telephone trading is often divided into – off-exchange futures trading of initial placements of shares, bonds and other financial instruments (trading on terms of issue; trading per appearance, pre-IPO trading [where IPO is the customary term for Initial Public Offer]; sometimes also called bridge financing), – off-exchange trading of unlisted securities and – pre- and off-exchange trading of listed securities, i.e. trading outside stock exchange opening hours. Until now, telephone trading has not been subject to any special supervision. – See over-the-counter trading.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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