An order-driven market is a stock market in which shares are exchanged without the intervention of a specialist with a financial background and sufficient experience to know the market well and to be a direct counterparty. Investors are then forced to split their orders when their volume is too large. History edit code
Order-driven markets are, in their very conception, opposed to so-called "counterpart" or "price-driven" markets, which dominated until the mid-1980s in France and are still in use on Wall Street. They appeared in Europe in the mid-1980s, especially on the Paris Stock Exchange, which decided to use electronics, for the spot market, in the form of a market run by the orders.
In an order-driven market, liquidity depends on the orders submitted by participants, which exposes it to an immediate liquidity breakdown in the event of a crisis in periods of high volatility. The market then has an interest in encouraging the proliferation of order books, so that liquidity is sufficient to guarantee permanently relatively acceptable prices for all stakeholders. Related Articleschange the code change the code
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