"We did see bids and offers yesterday, but we didn't actually see any trades, " said Hagood.
Handelsblatt's exchange shows the order book for bids and offers in its currency, the WMark.
But imagine a vast electronic exchange on which literally millions of bids and offers are constantly flickering.
As bids and offers accumulate, deals are struck at levels both parties can live with, setting the market price.
FORBES: Why the world would be better off with one big stock market.
Market makers traders who put their capital at risk to provide bids and offers are increasingly being replaced by order-matching systems.
Trading firms that normally would post both bids and offers walked away temporarily until the volatility could sort itself out.
They play an increasingly important role due to the decimalization of the stock market, whereby bids and offers are in minuscule 1 cent differentials.
Trading firms have used stub-quotes, which are bids and offers way outside the normal range, as a way of meeting minimal market making requirements.
They can use dummy bids and offers to make it seem as if there is more interest in a contract than there truly is.
Beginning 16 years ago with the most active stocks, securities authorities required over-the-counter marketmakers to electronically display bids and offers that bettered their own quotes.
Part of the problem on May 6 was some of the prominent high frequency traders, who normally contribute bids and offers continuously all day long, stopped trading and thus liquidity vanished.
As a wholesale broker, Bernie did what his rivals hadn't thought of: He made the market more efficient by putting the bids and offers from primary dealers on Telerate's screen network.
Moving all those trades, now conducted mostly by phone between dealers and their customers, to a transparent exchange would cut into margins: If everyone can see price quotes in real time, the spread between the bids and offers will narrow.
Decimalization has narrowed the spread between the highest bids and lowest offers, meaning individual investors are paying less when buying stocks and getting more when selling them, much to the chagrin of Nasdaq marketmakers whose spreads have been crimped.
But power prices are still compiled from bids by distributors and offers by producers, not on the basis of actual trades.
ECONOMIST: Is there life after Enron in Europe's power markets?
When you read the tape you can determine whether a stock will go up or down from its present price by looking strictly at the bids, the offers, and the prints.
Company executives make their pitches and submit blind bids with no promise of an opportunity to raise their offers.
The auction agent ranks the offers by their rate, and then applies to all accepted bids the clearing rate, the lowest rate at which bids will cover all the securities for sale.
应用推荐