Quote Driven Market
Definition of 'Quote Driven Market'An electronic stock exchange system in which prices are determined from bid and ask quotations made by market makers, dealers or specialists. In a quote driven market, also known as a price driven market, dealers fill orders from their own inventory or by matching them with other orders. A quote driven market is the opposite of an order driven market, which displays individual investors' bid and ask prices and the number of shares they want to trade. |
|
Investopedia explains 'Quote Driven Market'Order execution is not guaranteed in an order driven market, but it is guaranteed in a quote driven market because market makers are required to meet the bid and ask prices they quote. A quote driven market is more liquid but lacks transparency. A hybrid market combines the features of both quote driven and order driven markets. The NYSE and Nasdaq are both considered hybrid markets. |
Related Definitions
Articles Of Interest
-
Understanding Order Execution
Find out the various ways in which a broker can fill an order, which can affect costs. -
Market Makers Vs. Electronic Communications Networks
Learn the pros and cons of trading forex through these two types of brokers. -
What is the difference between a quote driven market and an order driven one?
The difference between these two market systems lies in what is displayed in the market in terms of orders and bid and ask prices. The order driven market displays all of the bids and asks, while ... -
War's Influence On Wall Street
Blitzkrieg? Dawn raids? Sounds like the markets and the battlefield have a few things in common. -
Has High Frequency Trading Ruined The Stock Market For The Rest Of Us?
HFT is a controversial trading strategy. This article looks at how HFT affects the retail investor. -
What is a stock ticker?
A stock ticker is a report of the price for certain securities, updated continuously throughout the trading session by the various stock exchanges. A "tick" is any change in price, whether that ... -
Institutional Investors
Learn more about the advantages that financial institutions enjoy when buying and selling securities. -
Weighted Average
Learn how to weigh the relative importances of data points in a calculated average. -
Bid-Ask Spread
Find out more about this frequently referenced, but often misunderstood, term used to describe the price at which a stock is bought or sold at. -
Why Is Liquidity Important?
Learn more on why liquidity is important to consider when examining a stock, next to its share price.
Free Annual Reports