Direct trading of large blocks of securities between institutional investors to avoid brokerage commissions. Quotes can be obtained through a service called Instinet, an acronym for Institutional Networks Corporation. See: Commission; Instinet
Institutional investors, including mutual fund companies and pension funds, who trade large blocks of securities among themselves rather than on one of the traditional exchanges or the Nasdaq Stock Market (Nasdaq), are operating in what's called the fourth market. The trades are handled through electronic communications networks (ECNs).Among the appeals of the ECNs are the reduced cost to trade without going through market makers, the ability to trade after hours, and the fact that offers to buy and sell are matched anonymously.