Order Driven Market


DEFINITION of 'Order Driven Market'

A financial market where all buyers and sellers display the prices at which they wish to buy or sell a particular security, as well as the amounts of the security desired to be bought or sold. This is the opposite of a quote driven market, which is one that only displays bids and asks of designated market makers and specialists for a specific security.

BREAKING DOWN 'Order Driven Market'

The biggest advantage of an order driven market is transparency, since the entire order book is displayed for investors who wish to access this information. Most exchanges charge fees for such information. On the other hand, an order driven market may not have the same degree of liquidity as a quote driven market, since the specialists and market makers in the latter have to transact business at their posted bid and ask prices.

  1. Auction Market

    A market in which buyers enter competitive bids and sellers enter ...
  2. Ask

    The price a seller is willing to accept for a security, also ...
  3. Quote Driven Market

    An electronic stock exchange system in which prices are determined ...
  4. Bid

    1. An offer made by an investor, a trader or a dealer to buy ...
  5. Fractal Markets Hypothesis (FMH)

    An alternative investment theory to Efficient Market Hypothesis ...
  6. Spot Rate

    The price that is quoted for immediate settlement on a commodity, ...
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  1. What is the difference between a quote driven market and an order driven one?

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