Quote driven trading system

A trading system in which orders trade at prices set by market maker quotes rather than by being matched against other investor's orders (the opposite of order driven system).

The advantage of quote driven systems is that they improve liquidity, because investors can be sure that they can at least deal in reasonably small quantities of shares (large parcels are another matter) at the price quoted by a marker maker.

Some trading systems are hybrids of quote driven and order driven systems.

Copyright © 2005-2016