Who provides binding quotes (bid and/or offer) for certain securities during the trading day and may require minimum bid/ask volume?

Who provides binding quotes (bid and/or offer) for certain securities during the trading day and may require minimum bid/ask volume?

• A. Liquidity providers
• B. Traders
• C. In-house crossing
• D. Market makers

Answer: (D)

Market makers post and stand behind binding bids and offers during the trading day, effectively committing to trade at those prices. They usually specify a minimum quantity (minimum bid/ask volume) that must be executable, ensuring the quotes represent real, usable liquidity. This obligation helps keep markets orderly and gives investors reliable execution opportunities. Traders don’t inherently provide firm quotes, and internal crossing bypasses the public book, so the role focused on posting reliable, executable quotes is that of the market makers.

Market makers post and stand behind binding bids and offers during the trading day, effectively committing to trade at those prices. They usually specify a minimum quantity (minimum bid/ask volume) that must be executable, ensuring the quotes represent real, usable liquidity. This obligation helps keep markets orderly and gives investors reliable execution opportunities. Traders don’t inherently provide firm quotes, and internal crossing bypasses the public book, so the role focused on posting reliable, executable quotes is that of the market makers.