Market Price

Discussions specific to trading the stock market.
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TrendMonkey
Roundtable Knight
Roundtable Knight
Posts: 154
Joined: Fri Apr 22, 2005 9:14 pm
Location: Vancouver, Canada

Market Price

Post by TrendMonkey » Fri Oct 21, 2005 1:10 pm

I have always wondered this. For stocks that are (a) thinly traded and (b) managed by a single Specialist or Market Maker (eg. lots of stocks on Toronto), what determines the market price when the floor gets a market order and there are no orders on the other side or in the limit order book? What prevents the Specialist from deciding Market Price is 10% below the last trade that happened a week prior?

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