Equity and Markets - Order driven vs Price driven market

jarobi04

page 23 of Schweser notes Equities Book 3:
I need some clarification as to which type of market uses which type of order, market or limit.
thanks

meghanjackson

In an order driven market, buy and sell orders come in at various prices. Those buy and sell orders that match in price are executed. There are no specialists/market makers in this market.
A Price Driven market is run by specialists (market makers). Specialist provides a quote to buy and sell a security (bid and ask prices) and market orders are executed at these prices.
Your question is too general. If this does not help, may be you can frame a more specific question.

spartan1

NYSE – both Order and price driven (mostly order driven)
NASDAQ – Price driven market ..
So when we say market makers we mainly refer to NASDAQ

mar350

My question is:
there are two types of markets: price-driven and order driven, order-driven markets; can someone explain the use of limit orders and market orders for these two markets?

Kiakaha

There are no limit orders for a price driven market. In a price driven market (NASDAQ), dealers/market makers make the bid and the ask spread. For order driven markets, you have an order book with limit orders based on what investors want to pay and at what price they want to sell.

spartanag07

thanks…understood.