Series 24: Two-Sided Quote Obligation

Taken from our Series 24 Online Guide

Two-Sided Quote Obligation

A stub quote is a quote that is so far away from the prevailing market it is not intended to be executed. Stub quotes were used in the past by market makers when they did not want to trade at certain prices but needed to meet their two-sided trading obligation. On May 6, 2010, a deep drop in the market triggered the execution of a large number of trades against stub quotes.

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