What is market structure and why do I need to know?

In economic terms, it’s the number, size, kind and distribution of buyers and sellers. For investor relations practitioners, the markets globally are moving to a participant model and away from classic NYSE-style auctions, thanks to trading automation and market regulation requiring transparency.

Since the number, size, kind and distribution of participants determine how the buyside and sellside interact with equities, and therefore how equities are owned or traded, it’s crucial for IROs to possess basic comprehension of their stocks’ market structure.

What Others Are Saying

“The market structure we’ve ended up with is great for trading, but it’s not great for investing.”
Duncan Niederauer
NYSE President

“More and more of the world’s trading is done by spraying dark orders across multiple destinations using deliberately complicated patterns and algorithmic models that can’t be discovered or duplicated. No one knows who’s doing what to whom anymore.”
Dan Mathisson
Credit Suisse managing director

“If your investor relations department continues to practice in a traditional manner—especially in this rapidly changing investment environment—it will become increasingly irrelevant.”
Lou Thompson
former CEO of NIRI

How Can ModernIR Help?

ModernIR’s trading intelligence service, Equity Analysis, provides insight into your stock’s market structure by focusing on executed trades. Traders control liquidity, manage costs on the buyside and sellside, and drive the algorithms that even fundamental investors now use to manage capital.

Understanding this activity can be the difference between telling management

“I have no idea”


“We think the market won’t respond much at first, but we’re likely to go into a prolonged slide after options because all these derivatives strategies will reset lower. Therefore, we’re going to retool our message to highlight core value drivers and concentrate our effort over the next quarter on long-term value investors.”

Which would you prefer?

Equity Analysis is not stock surveillance. Stock surveillance is based on settlement, which relies on analyst interpretations of data to determine who actually purchased your stock. This is fast becoming irrelevant in an algorithmically dominated market. For more information, please see: Stock Surveillance – Getting What You Pay For?

Request a demo of Equity Analysis

For additional information on market structure, please see:
Market Structure – Key Words for IRO’s Lexicon