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?

c) 6 3/4 - 6 7/8
Yes. The market maker quotes are usually better than the limit prices stated in the customer orders. At the same time, they are only displayed if they are not immediately executable, i.e. do not match with an order or another quote. Continue

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