Chapter 04 · Section 4.1

Market Maker vs. Specialist-1

What do the Competing Market Maker System and the Specialist system have in common?

a) Public orders have priority in the matching process.
b) Market makers have an obligation (i.e. not just the right) to quote according to certain requirements.
• c) Instead of floor brokers there are market makers who have certain obligations to quote both buy and sell prices.
  No. There are market makers in both, but both have floor brokers, too. It would be difficult in a floor trading system to do without floor brokers: how would customer orders get onto the exchange?

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