Alternative Trading Systems

This question tests a candidate’s understanding of how equity trading can occur outside listed exchanges and how those venues differ in structure, transparency, and regulatory treatment. It covers the distinction between trade types and trading venues, the role of hidden liquidity and off-exchange execution, and the basic reporting or listing implications that come with each setup. Interviewers ask this because sales and trading candidates need to understand market microstructure, where orders go, how large trades are handled, and why certain securities trade outside traditional exchanges.