Interdealer Market

Stock markets (exchanges like the NYSE or the NASDAQ) are public markets...anyone can jump in. You just need a broker or an online trading account and you're good to go.

Interdealer markets are reserved for large financial institutions, companies like banks or investment funds. Instead of being organized as a formal exchange, an interdealer market exists as a loose collection of dealers (hence the name, "interdealer"). Foreign currency is often traded in this way. The setup lends itself to transactions involving large amounts of currency.

Think of it like going to Florida. There's the public beach, with kids running around, and gross, sunburnt, middle-aged people in bikinis and speedos lying in tightly-packed rows of blankets. But then, nearby, you can just catch a peek of the private beach: tanned, toned people in private cabanas sipping frosty drinks with pineapple wedges on the lip.

That's the stock market vs. the interdealer market.