Quote-Driven Market

Do Quote-Driven Markets provide Price Discovery?

Yes of course. Price discovery is when buyers and sellers interact with each other to adjust prices. Only in ECN (crossing networks) there is no price discovery because the execution price is the mid-point of bid/ask and prices are established only at certain times during the day,

mik82 Wrote: ------------------------------------------------------- > Yes of course. Price discovery is when buyers and > sellers interact with each other to adjust prices. > Only in ECN (crossing networks) there is no price > discovery because the execution price is the > mid-point of bid/ask and prices are established > only at certain times during the day, Be careful with the term ECN, ECN actually stands for (per CFAI) Electronic COMMUNICATIONS Network, which DOES provide price dicovery. However, you are correct that Electronic CROSSING networks do NOT provide price discovery because they use the prices attained from other markets.

Yeah I have noticed the potential trick there (crossing vs communications networks)

I think only Electronic CROSSING networks do NOT provide price discovery. All others (Including brokered market) provide price discovery. Am I right ?