A Quote-Driven Market is one in which trades are determined by those who make the markets, rather than the investors. In a quote-driven market, dealers and specialists are looking to fill orders from their inventory or match them with other orders. This type of market is often used for thinly traded securities, such as penny stocks.There are both advantages and disadvantages to having a quote-driven market. One advantage is that it can provide liquidity for securities that might otherwise be difficult to trade. Another advantage is that it can help to ensure that prices remain fair and efficient by preventing large imbalances between buyers and sellers from developing.However, there are also some drawbacks to this type of market structure. One disadvantage is that it can be more difficult for individual investors to get their orders filled at the price they want since they may have to compete with larger institutional players who have more clout in the marketplace. Additionally, this type of market may be more susceptible to manipulation by insiders who know how best to take advantage of its quirks."
