“What services do inter-dealer brokers offer?”

Inter-dealer brokers (IDBs) operate in financial markets as intermediaries facilitating transactions between financial institutions. They do not engage in trading assets themselves but act as agents between parties such as banks, hedge funds, and other investment firms, primarily for over-the-counter (OTC) markets. Their services include matching buyers and sellers, managing large orders, and ensuring liquidity in markets where direct counterparties can be difficult to find. They operate across various asset classes, including bonds, derivatives, foreign exchange, and commodities. These brokers provide anonymity to trading parties, thereby preventing market impact that might occur if a trade’s size became publicly known. Additionally, they offer critical services like market intelligence, price discovery, and access to complex financial instruments that can be tailor-made to clients’ needs. Essentially, IDBs play a crucial role in bringing efficiency and transparency to financial markets, aiding in smoother and more effective trading operations.