Quote Driven Market
Categories: Trading
He said. Then she said. They're both nervous. Maybe backs of fingers are touching. And then one of them blurts out, "$23." Even though the stock was trading at $15.
One broker is quoting a price-at-volume of some huge up-price print. Just the rumor of that stock suddenly getting hot, with so much money sitting on the sidelines, is enough to make a horny, jittery market jump and react quickly, bidding up the $15-a-share stock fast to $23, or at least heading quickly in that direction.
That's a quote driven market. The brokers own the samosas of the buy side investors, who are nervous to be sitting out a big bull market, and who are anxious to jump early onto the next MegaTrend.
Related or Semi-related Video
Finance: What is a Firm Deal: Commit, Qu...7 Views
Finance allah shmoop What are a firm deal Ah firm
commit and a firm quote No a lot of firms
here is by agra involved in this one No Well
okay people Yes You knew we were going to go
there We'll start with firm commit Well the whole notion
of a firm commit applies on a few fronts Like
if a lender is lending dough Well usually there is
a contractual agreement cleverly called a firm commitment letter and
it derives a firm deal like the deal will follow
that commitment And that letter specifies the amount of money
the lender is willing to lend at a given interest
rate With all the terms you know spelled out for
given time like this offer is good for thirty days
or until june first Or until the where wolf grows
What they crow Don't they Okay howl whatever In an
ai po when a bank is selling shares on behalf
of a company issuing them a firm commit gives rise
to a firm deal And it basically says that the
bank is responsible for selling any unsold shares That is
It's called a quote bought deal unquote And the bank
Either sells those aipo shares to investors or well they
buy them for their own account In a firm quote
the commitment involved usually refers to a broker dealers bid
ask spread in selling those shares like she holds a
few million shares of amazon in inventory and publishes to
her constituency that she is firm as a buyer at
eleven hundred two and twenty and a seller at eleven
hundred eight and fifty Got it sets one one zero
two point two zero in a cellar at one one
zero eight point five oh yeah that's how it would
look well if anyone matches those numbers then she is
legally obligated to sell them And just in case someone
wants to buy a good gillian shares i am or
than she carries in inventory well there's usually a limit
number attached to her offer for like i stand firm
on one hundred thousand at this price like a hundred
thousand shares and not a hundred thousand won something like
that anyway so firm think obligated confirmed contracted for legally
binding and sometimes yeah that'll give you cramps Just try 00:02:17.1 --> [endTime] prunes