What is a defining feature of a hybrid market?

A hybrid market is characterized by its combination of different trading methods, specifically integrating traditional auction processes with direct trading. This approach allows for greater flexibility and efficiency in executing trades. In a hybrid market, participants can place orders, and these can be matched either through an auction system where competitive prices are established or through direct trades between participants, facilitating a more dynamic trading environment.

This integration appeals to various market participants as it can enhance liquidity and provide multiple avenues for executing trades at potentially favorable prices. It also allows for a seamless transition between traditional and electronic trading methods, accommodating the preferences of different traders. Hence, this combination of auction and direct trades is a core element that defines a hybrid market, distinguishing it from markets that are strictly electronic, solely rely on intermediaries, or are limited to specific transaction types.