I won’t go into a definition of an intermediary here. But I will stick with the key point: they are middlemen in clearance and settling. I agree that the definition can change based on country, exchange and even type of security.
What is germane here is that it wholly unclear from what Duncan said where liquidity comes from. I made some assumptions (giving him the benefit of doubt).
I have reasonable knowledge about investing etc but not the sausage machine that makes it happen, lots of people will.be following your posts - any chance of some hyperlinks/acronyms explanations so we can all learn?
Hey @NeilB I am not an expert on all of this, I know about and understand only some bits, and I seem to forget loads after I learn about some new bits :-). So I usually assume it’s turtles all the way down.
tends to have at least some basic but trustworthy information.
If we have DMA in those order-driven markets then the Central Limit Order Book (CLOB) is the only liquidity providing mechanism we need. To hell with those market-driven systems with wide spreads and fleecing market makers. Let’s see what answers my questions get from Duncan.
We are discussing past each other. All I said is that middlemen continue to exist and provide liquidity.
To your new message well CLOB is a market driven system. If you have used a direct market system (which at least for some years has been available to professional retail clients in the UK) or worked with the technology you will see straight away that there is a spread with them. Would be fooling myself if I believed that I was there on the floor of an exchange playing on the same field as an algo trader.
I am not even accidentally arguing for the existence of market makers.