Chapter 04 · Section 4.1

Competing Market Maker System

In the Competing Market Maker System, the OBO displays the best prices of the public order book, for instance:

            Close   Last    Bid/Ask      Size       Quote   
Call TCA 
Jan 40      6 3/8   6 3/4   6 1/2 - 7    17x8       .. - ..

Under "quote", the best quotes (bid/ask) entered by the trading crowd (i.e. the market makers) are displayed. Which of the following bid/ask prices is most likely to be seen under "quote" in the above OBO display?

b) 7 1/8 - 7 1/4
No. This quote could not possibly remain on the board: the 7 1/8 bid in quote would be matched immediately with the customer order (ask) to sell at 7.
c) 6 3/4 - 6 7/8

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