Peer-to-peer trade includes direct, decentralized interactions between two sides without a central broker or exchange. Here is the division of the basics:
Key player
- Buyer : A page that buys securities (e.g. stocks, bonds) from a different angle.
- Seller : A page that sells securities to the buyer.
- Market creators : People or companies who deliver liquidity and carry out transactions on behalf of other market participants.
Decentralized trading platforms
Peer-to-peer trade can be facilitated by various decentralized platforms, such as: B.:
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- Börsen platforms : Internet platforms that connect buyers and sellers with the trade in securities.
- Commercial places : Physical locations or online rooms in which the market participants can interact directly.
Key concepts
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- Liquidity Suppliers : People or companies who offer liquidity with a trading platform and enable faster trading.
- Market depth
: Extent of commercial activities in a certain security, which reflects the number of buying and consumers.
Advantages
- Increased efficiency
: Decentralized trading platforms can carry out transactions faster than conventional stock exchanges.
- Lower fees : Some decentralized platforms collect lower fees compared to conventional stock exchanges.
- Improved availability : Internet platforms can connect buyers and sellers with a wider range of participants.
Risk and challenges
- Liquidity risk : The creators of the market or the liquidity suppliers may not always be available, which leads to potential price disorders.
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- Adjusting the challenges : Decentralized trading platforms often work outside of conventional regulatory framework.
Best Practices
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- Set clear goals , risk management strategies and stop-stray values to avoid considerable losses.
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In summary, peer-to-peer trading offers a number of advantages, including increased efficiency, lower fees and better availability. However, this is also associated with risks and challenges that require careful consideration and cleverness. Understanding the basics of peer-to-peer trade and buyer and seller can make well-founded decisions to alleviate potential traps.
