RE: GAP NEEDS TO BE FILLED28 Nov 2020 06:55
"Those of us who have traditionally invested in small cap AIM listed stocks are familiar with the SEAQ trading system, where the share trader/investor buys from and sells to a market maker, via his stockbroker. The market maker is the middleman. His job is to do exactly as his name suggests - make a market. ............ So that's SEAQ. Love it or hate it and its big spreads, most punters are familiar with it and some even understand how it works. You could describe it as "the devil you know"!
"In the meantime, on the main market, for the big boys, there has been another trading system. Known as SETS - the Stock Exchange Electronic Trading Service - it was introduced at Big Bang time in 1997, when the LSE moved from its traditional trading floor, where brokers and market makers met in the flesh to do their deals, to an automated system run by computers. Used for the trading of shares in large companies with high liquidity (i.e. lots of buying/selling activity) SETS cuts out the middleman.
"In simple terms, those who have access to the SETS order book and have shares for sale will enter a sell order on to the book. Those who wish to buy will enter a buy order into the order book. The system will automatically match up buyers and sellers who match on price - often one large order will be matched up with several smaller orders on the "other side". The matched orders are removed from the book, and a transaction is executed between buyer and seller. Again, each transaction is both buy and sell, and again, only one transaction report is required. These automated trades have a trade type of AT."