Quote-Driven Market
Market Microstructure glossary · Market Microstructure Fundamentals
Definition
A market in which designated dealers post firm bid and ask prices and public traders trade against those quotes.
Quote-Driven Market in plain English
In a quote-driven market, you don't trade directly with another regular person — you trade with a professional 'dealer' who always stands ready to buy from you at one price and sell to you at a slightly higher one. It's like a currency-exchange booth at the airport: the booth posts firm prices, and you just take the deal rather than haggling with other travelers. The dealer earns the small gap between their buy and sell prices in exchange for always being available to trade.
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