trading in the uk is on a whimper not a bang

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    Worth reading how the LSE puts an order through. The refusal to have a 100% automated system is keeping a lot of marketmakers and brokers in business. It all belongs in the stone age. Maybe it needs a Murdoch to get them going.

    When you place an order with your broker it will be executed using one of four market systems – SEAQ, SETS, SEATS Plus or SEAQ International.

    The two most commonly used systems are SEAQ and SETS. SEAQ, which stands for Stock Exchange Automated Quotation System, is a quote driven market. Under the system competing market makers offer prices on shares to stockbrokers which they can then choose between. Read more about the role of market makers in who does what in the market.

    SETS, which stands for Stock Exchange Electronic Trading Service, has become the main system used for trading shares in the UK since its launch in 1997. Under this system, which is used to trade the bigger, more liquid stocks, orders from stockbrokers wishing to buy or sell shares are automatically matched.

    If a stock only has one market maker it cannot be traded on SEAQ and so will, instead, be traded on SEATS Plus. This system combines the order driven and quote driven systems by allowing a single market maker to quote prices in a company’s shares and then also allows brokers to put orders forward to the market. If you buy stocks listed on the AIM market they will be traded here.

    If you want to buy international stocks that are traded in London your order will be executed through SEAQ International.

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