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Get Started in Shares by Glen Arnold

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Quote-driven trading

Quote-driven trading is how most stock exchanges used to be operated – and many still are. With this type of approach, market makers (dealers) give a price at which they would buy (lower price) or sell (higher price), and make their profits on the margin between buying and selling. The market maker’s bid is the price at which they are willing to buy and offer (or ask) is the price at which they are willing to sell.

What happens in computerised trading? When you mention the company name, the broker immediately enters in its company code. In the UK, the computer is linked to the London Stock Exchange (LSE) Automated Quotations (SEAQ™, pronounced ‘see-ack’) system. This is a system for distributing the prices offered by market ...

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