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more on NASDAQ

Some more information on NASDAQ as OTC
OTC, where traders arranged private deals over the telephone. Many stocks in the OTC market are
served by the National Association of Securities Dealers Automatic Quotations (NASDAQ),
which is an electronic quotation system that provides immediate price quotations. It was developed
to link brokers and dealers in a computer network where price quotes could be displayed and
revised. Dealers could use the network to display the bid price at which they are willing to purchase
a security and the ask price at which they were willing to sell. Originally, NASDAQ was more of
a price-quotation system than a trading system. While brokers could survey bid and ask prices
across the network of dealers in search for the best trading opportunity, actual trades required direct
negotiation (often over the phone) between he investors broker and the dealer in the security.
However, NASDAQ has evolved into an electronic market. While dealers will post bid and ask
prices over the network, the vast majority of trades are executed electronically without need of
direct negotiation.
The most significant difference between the New York Stock Exchange and NASDAQ is how
buyers and sellers trade securities (to correct: not because whether stocks are listed or not). NYSE
facilitates and operates like an auction market, while NASDAQ creates the market for trades via
what’s known as a dealer.
It does not mean that stock exchanges cannot run auction market type of ECNs, e.g. The London
Stock Exchange’s quote driven market: SEAQ system (Stock Exchange Automated Quotation) is
a dealer market. At the same time, The London Stock Exchange also has electronic order-book
system called SETS (Stock-exchange Electronic Trading Service).