what is a quote driven market 
a quote driven market is an electronic stock exchange system in which prices are determined from bid and ask quotations made by market makers dealers or specialists in a quote driven market also known as a price driven market dealers fill orders from their own inventory or by matching them with other orders a quote driven market is the opposite of an order driven market which displays individual investors bid and ask prices and the number of shares they want to trade understanding a quote driven marketquote driven markets are most commonly found in markets for bonds currencies and commodities quote driven markets are also known as a dealers market because all trades are executed through dealers the dealers working with investment banks commercial banks and broker dealers provide quotes for different instruments and all customers need to trade through them at the quoted prices some people may also refer to quote driven markets as a dealer or price driven market the following are some of the key points about the quote driven market traders may either accept the prices quoted by the dealers or try to negotiate better prices either themselves or through their broker or agent in a pure quote driven market all traders must trade through dealers however dealers may also trade among themselves through inter dealer brokers in a quote driven market dealers supply all the liquidity in the market dealers may choose not to execute a trade for a specific client this is often done because some dealers specialize in certain types of clients such as retail or institutional hybrid markets like the nyse and nasdaq combine aspects of both quote driven and order driven markets order driven markets vs quote driven marketsorder execution is not guaranteed in an order driven market but it is guaranteed in a quote driven market because market makers are required to meet the bid and ask prices they quote a quote driven market is more liquid than an order driven market but lacks transparency a hybrid market combines aspects of both quote driven and order driven markets the nyse and nasdaq are both considered hybrid markets in an order driven market orders of both buyers and sellers are shown displaying the price at which each is willing to buy or sell a stock and the quantity of the stock that they are willing to buy or sell at that price an order driven market is transparent in the sense that it clearly shows all of the market orders and the prices at which people are willing to buy or sell which is not the case for quote driven markets furthermore a quote driven market is more liquid due to the presence of market makers but this is not the case for order driven markets 