SEAQ

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The Stock Exchange Automated Quotation system (or SEAQ) is a system for trading small-cap London Stock Exchange (LSE) companies. Stocks need to have at least two market-makers to be eligible for trading via SEAQ. New securities cannot be listed via the SEAQ system.^[1] In the LSE, only AIM stocks with low liquidity are traded on the SEAQ market.^[2] It is a quote-driven market made by specialized and competing dealers, also known as market-makers. The system contains no public limit order book.

The idea behind the SEAQ system is that individual investors should always be able to trade and that the element of competition between market-makers should lead to narrower dealing Bid–ask spreads. However, Bid/Ask spreads and hence trading costs on SEAQ are typically high because of the combination of the market-maker driven trading system and the lack of liquidity.^[3]