When the market is considered to be driven by quotes, the transactions are determined by those who make the markets, not by investors, with dealers and specialists who want to fill orders from their inventory or match them with other orders.
This is different from an order-driven market, which is based on what individual investors are looking for, including their bid and ask prices and the number of shares they want to sell.
Dealers work with banks and brokers/dealers to provide quotes for various securities and investors can either trade through them at quoted prices or try to negotiate through their agents.
Bond, currency, and commodity markets are often price-driven, while stock markets tend to be order-driven or a combination of both.
The Bloomberg terminal, developed by businessman Michael Bloomberg, is a popular hardware and software system that allows investors to access real-time market data, investment analytics and their own trading platforms.
The Electronic Communications Network (ECN) is a digital system that connects buyers and sellers who wish to trade securities in the financial markets.
The NASDAQ Global Select Market Composite is a market capitalization-weighted index of approximately 1,400 stocks representing the NASDAQ Global Select Market.
The OTC Bulletin Board (OTCBB) was a regulated over-the-counter (OTC) securities quotation service provided by the Financial Industry Regulatory Authority (FINRA).
Stock screeners are tools that allow investors and traders to sort through thousands of individual securities to find those that fit their own methodologies.
Risk acceptance or risk containment is a conscious strategy of recognizing the possibility of small or rare risks without taking measures to hedge, hedge or avoid these risks.
Arbitrageurs are investors who exploit market inefficiencies of any kind. They are necessary to ensure that inefficiencies between markets are smoothed out or kept to a minimum.
Asset-Backed Securities (ABS) are financial securities backed by income-producing assets such as credit card receivables, home equity loans, student loans, and auto loans.
Audit risk is the risk that the financial statements will be materially incorrect, even if the auditor’s report indicates that the financial statements do not contain any material misstatement.
A beneficial owner is a person who enjoys the benefits of ownership, despite the fact that the ownership of the property is registered in a different name.
The bid-ask spread is the difference between the highest price a buyer is willing to pay for an asset and the lowest price a seller is willing to accept.