What role do brokers play in closed-book markets?

In closed-book markets, brokers play a crucial role in locating the best bid and ask prices. This function is vital because closed-book markets limit the visibility of orders and trades, making it more challenging for participants to gauge market depth and price movements. By identifying the optimal bid and ask prices, brokers help clients make informed decisions on when to execute trades, ensuring they achieve the best possible price available in the market.

Locating the best bid and ask not only aids individual traders but also contributes to the overall efficiency of the market, as it facilitates better price discovery despite the limitations that closed-book markets impose. It allows traders to navigate the market more effectively, enhancing their chances of successful trades.

The other options describe functions that are not typically associated with brokers in closed-book markets. For example, providing liquidity through market-making involves actively quoting prices and trades, which may not be effectively accomplished when transparency is compromised. Creating trading algorithms is more aligned with quantitative finance roles, while executing trades based on public orders does not capture the essence of how brokers utilize their knowledge to enhance trading under the conditions presented by closed-book structures.