Question:
What kind of market model does the NEAT system support?
What kind of market model does the NEAT system support?
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In an order-driven market like NEAT, price discovery is determined entirely by the natural supply and demand of buy and sell orders in the order book.
Updated On: Jun 22, 2026
- Quote-driven
- Order-driven
- Dealer-driven
- Hybrid
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The Correct Option is B
Solution and Explanation
Step 1: Contrasting Market Models:
Markets are generally structured in one of two ways:
• Quote-driven (or Dealer) Markets: Market makers or dealers quote buying and selling prices continuously, and investors must trade directly with them.
• Order-driven Markets: Buyers and sellers submit their orders directly to a central pool, and a computerized system matches them without intermediary market makers.
Step 2: Explaining the NEAT System:
The NEAT (National Exchange for Automated Trading) system of the NSE is a fully automated, screen-based trading platform.
Step 3: Identifying NEAT's Core Model:
NEAT operates as a pure order-driven market (B). All orders entered into the system are stored in an electronic order book and automatically matched based on price-time priority, providing a transparent, fair, and disintermediated trading environment.
Markets are generally structured in one of two ways:
• Quote-driven (or Dealer) Markets: Market makers or dealers quote buying and selling prices continuously, and investors must trade directly with them.
• Order-driven Markets: Buyers and sellers submit their orders directly to a central pool, and a computerized system matches them without intermediary market makers.
Step 2: Explaining the NEAT System:
The NEAT (National Exchange for Automated Trading) system of the NSE is a fully automated, screen-based trading platform.
Step 3: Identifying NEAT's Core Model:
NEAT operates as a pure order-driven market (B). All orders entered into the system are stored in an electronic order book and automatically matched based on price-time priority, providing a transparent, fair, and disintermediated trading environment.
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