price driven market

Read this in Schweser- In a price-driven system, the dealer provides a free option when a firm quote is posted. Not sure I understand what this means?!

i dont think it meens much…i belive all that it is saying is: usally you would need to buy a call option so that you can buy a certain asset at a specific price… well when the dealer posts quotes, he kind of gave you a free call option…any time you want, untill that quote is changed, you can come and buy at that price… verses in an order driven market you dont have that option, the price you get depends on the market conditions i think what i say is right, there realy cant be much more to it…

does it say anything else?

good call gulf

hola AndrewUNH, how many questions have you done so far 100, 000 lol ? you started with questions back when i was still reading the material…

IMHO, When the dealer posts a quote he runs the risk of being “picked off” by a better informed trader who (based on favorable or unfavorable information) can purchase or sell a stock at an “unfair” for the dealer price. That’s why the dealer effectively provides a free option to traders in a price - driven system.