Internalization Unlike block facilitation trades, where a broker-dealer commits capital to accommodate a large trade for an institutional investor, internalization involves creating a proprietary trading revenue which keeps retail orders within the firm ("internalized") with the broker-dealer buying from its sell orders and selling to its buy orders, generally at the published best bid/offer or a penny better. The result is that a firm with a large amount of retail orders has a trading opportunity to make a "dealer spread" (buying at the bid and selling at the offer) without interference and will layoff any unwanted position in the primary market. The NYSE believes this practice reduces transparency, impairs price discovery and harms investors.