http://www.investopedia.com/terms/q/quotedriven.asp#axzz2FID9sqge
Quote Driven Market
Definition of 'Quote Driven Market'
An electronic stock exchange system in which prices are determined from bid and ask quotations made by market makers, dealers or specialists. In a quote driven market, also known as a price driven market, dealers fill orders from their own inventory or by matching them with other orders. A quote driven market is the opposite of an order driven market, which displays individual investors' bid and ask prices and the number of shares they want to trade. Investopedia explains 'Quote Driven Market'
Order execution is not guaranteed in an order driven market, but it is guaranteed in a quote driven market because market makers are required to meet the bid and ask prices they quote. A quote driven market is more liquid but lacks transparency. A hybrid market combines the features of both quote driven and order driven markets. The NYSE and Nasdaq are both considered hybrid markets.
Order Driven Market
Definition of 'Order Driven Market'
A financial market where all buyers and sellers display the prices at which they wish to buy or sell a particular security, as well as the amounts of the security desired to be bought or sold. This is the opposite of a quote driven market, which is one that only displays bids and asks of designated market makers and specialists for a specific security. Investopedia explains 'Order Driven Market'
The biggest advantage of an order driven market is transparency, since the entire order book is displayed for investors who wish to access this information. Most exchanges charge fees for such information. On the other hand, an order driven market may not have the same degree of liquidity as a quote driven market, since the specialists and market makers in the latter have to transact business at their posted bid and ask prices.
