We use Nasdaq stocks to examine the spread patterns of Electronic Communication Networks (ECNs) and market maker markets under order imbalances. ECNs are order-driven markets while market maker markets are dealer-driven markets. After adopting Order Handling Rules in 1997, the Nasdaq Stock Market has become a hybrid market with quote-driven (market makers) and order-driven (ECNs) trading systems. We find interesting results. Spreads are smaller in ECNs than those in market maker markets. Spreads decrease as the participation rate of ECNs increases. The participation rate of ECNs is measured as accumulated quotes from ECNs over total quotes from both market makers and ECNs. We also find that the spread patterns are near flat regardless of the order imbalance conditions in ECNs. However, in the market maker markets, the spreads are maximized when orders are balanced and minimized when orders are imbalanc
