Choice Market

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DEFINITION of 'Choice Market'

A market in which the spread between the bid and the ask for a given financial instrument is zero - meaning that, at any point in time, the instrument can be bought for the same price as it can be sold in the market. This type of market only occurs when there is extreme liquidity and a limited number of intermediaries.

INVESTOPEDIA EXPLAINS 'Choice Market'

This is a rare occurrence in the financial markets, as most financial instruments trade with a spread between the bid and the ask. The market that most closely resembles a choice market is forex, where some currency pairs trade with a spread of only a fraction of a percent. For example, the spread between the USD and EUR is usually only 1 basis point, or 0.01%.

RELATED TERMS
  1. Spread

    1. The difference between the bid and the ask price of a security ...
  2. Ask

    The price a seller is willing to accept for a security, also ...
  3. Liquidity

    1. The degree to which an asset or security can be bought or ...
  4. Slippage

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  5. Transaction Costs

    Expenses incurred when buying or selling securities. Transaction ...
  6. Currency Pair

    The quotation and pricing structure of the currencies traded ...
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