Double Auction Market

A system in which buyers enter competitive bidders and sellers enter competitive offers simultaneously, as opposed to the over-the-counter market, where trades are negotiated (NYSE and AMEX). Also called auction market.

A double auction market can also be carried out by open outcry, in which buyers and sellers call out prices that they are willing to buy and sell at, and a match is made if a buyer and seller call out the same price.

Double auction markets usually feature a large number of buyers and sellers, and thus participants tend to incur lower transaction costs than in the over-the-counter market.