these shares from or sell them to the public at the quoted bid and asked price. They earn profits from the spread between the bid price and the asked price. Level 3 subscribers may enter the bid and asked prices at which they are will- ing to buy or sell stocks into the computer network and update these quotes as desired. Level 2 subscribers receive all bid and asked quotes but cannot enter their own quotes. These subscribers tend to be brokerage firms that execute trades for clients but do not ac- tively deal in the stocks for their own accounts. Brokers attempting to buy or sell shares call the market maker who has the best quote to execute a trade. Level 1 subscribers receive only the median, or "representative," bid and asked prices on each stock. Level 1 subscribers are investors who are not actively buying and selling se- curities, yet the service provides them with general information. For bonds, the over-the-counter market is a loosely organized network of dealers linked together by a computer quotation system. In practice, the corporate bond market often is quite "thin," in that there are few investors interested in trading a particular bond at any particular time. The bond market is therefore subject to a type of "liquidity risk," because it can be difficult to sell holdings quickly if the need arises.     The Third and Fourth Markets   The third market refers to trading of exchange-listed securities on the OTC market. Until the 1970s, members of the NYSE were required to execute all their trades of NYSE-listed securities on the exchange and to charge commissions according to a fixed schedule. This schedule was disadvantageous to large traders, who were prevented from realizing economies of scale on large trades. The restriction led brokerage firms that were not mem- bers of the NYSE, and so not bound by its rules, to establish trading in the OTC market on large NYSE-listed firms. These trades took place at lower commissions than would have been charged on the NYSE, and the third market grew dramatically until 1972 when the NYSE allowed negotiated commissions on orders exceeding $300,000. On May 1, 1975, frequently referred to as "May Day," commissions on all orders became negotiable. The fourth market refers to direct trading between investors in exchange-listed securi- ties without benefit of a broker. The direct trading among investors that characterizes the fourth market has exploded in recent years due to the advent of the electronic communi- cation network, or ECN. The ECN is an alternative to either formal stock exchanges like the NYSE or dealer markets like Nasdaq for trading securities. These networks allow mem- bers to post buy or sell orders and to have those orders matched up or "crossed" with or- ders of other traders in the system. Both sides of the trade benefit because direct crossing eliminates the bid-ask spread that otherwise would be incurred. (Traders pay a small price per trade or per share rather than incurring a bid-ask spread, which tends to be far more ex- pensive.) Early versions of ECNs were available exclusively to large institutional traders. In addition to cost savings, systems such as Instinet and Posit allowed these large traders greater anonymity than they could otherwise achieve. This was important to them since they would not want to publicly signal their desire to buy or sell large quantities of shares for fear of moving prices in advance of their trades. Posit also enabled trading in portfolios as well as individual stocks. ECNs already have captured about 30% of the trading volume in Nasdaq-listed