Nasdaq is a company where transactions between the merchants and consumers are made online. Computers are able to track all the transactions made in Nasdaq but a human presence is still vital, which is also the one who makes the market.
In Nasdaq, there is no personal trading department. That is the minor difference of Nasdaq and NYSE. In NYSE, the prices of the items are based on orders, otherwise known as an auction market. There is a certain specialist who decides for the price of the items depending on the orders made.
In Nadaq, the sellers post their items along with their prices. The best price gets the deal first. How to sell your product quickly depends on how well you give the price.
Market maker is the company in-charge of registering with the SEC so that stock in Nasdaq will be bought and sold.
In the NYSE however, market makers do their job using a computer network, not on personal transactions.
What they do is to provide security throughout the exchange. Some of their actions are:
1. They put in orders for the sellers and their own as well.
2. They act as mediators so as to create profit from the bid and the price asked for the stock.
Buy and Sell
They must declare the price they are willing to buy a stock and a price that they are willing to sell. The prices they declare would then go to the Nasdaq system, which will then be ranked in orders.
The prices which are very sellable and buyable are then ranked first then filled with orders first. This is done automatically by Nasdaq computer system, which is very efficient and fast that no human could ever compare.
If there is a way to access Level II Nasdaq screen, one would be able to see how this process works. Level II screens show how the prices are ranked and reveal the huge amount of data and information regarding the orders and transactions.
Level II screens
There is a way to gain access to the Level II screen from sellers but it would cost even up to $300 monthly or even more. It would depend on what options and alternatives you choose.
Traders who work on tight margins need information like this but other investors don’t necessarily have access.
One good thing to keep in mind is, in Nasdaq, market makers make sure that they provide a secured market for inverstors and sellers as well. They do this by implementing the bid price and ask price system.
The system in Nasdaq fills orders for the best prices given first. With this, investors are assured of the best price given the moment they transact via the Nasdaq system, keeping in mind that they have to provide a secured market. However, they could not guarantee you of the price you want, only the best price at the moment.