quote-driven market

quote-driven market
A securities market which operates by market-makers quoting prices at which they will buy or sell, up to some quantitative limit. Prices are adjusted by the market-makers increasing their prices if they run short of stock, or cutting prices if they start accumulating excessive stocks. This is contrasted with an order-driven market, where orders to buy at or below given prices,and to sell at or above given prices, are accumulated until at intervals, for example daily, a market-clearing price is found and buying and selling orders consistent with this price are executed.