Order-Driven Market
Market Microstructure glossary · Limit Order Book Mechanics & Order Routing Logic
Definition
A market in which trades occur when buy and sell orders are matched by a central system, without a designated intermediary.
Order-Driven Market in plain English
Picture an online marketplace where everyone posts what they want to buy or sell, and a computer automatically pairs up a buyer with a matching seller — nobody sits in the middle deciding the price for you. That's an order-driven market: the buy and sell orders themselves create the trades and set the price, matched by a central system rather than by a designated middleman (called a dealer or specialist). Most modern stock exchanges work this way. The opposite would be a 'quote-driven' market, where you must trade through a dealer who quotes you a price.
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