Locked Market

AAA

DEFINITION of 'Locked Market'

A market in which a stock's bid and ask prices are identical. In a locked market, there is no bid-ask spread; normally, there is a difference between the highest price a buyer will pay for a security and the lowest price a seller will accept. Locked markets are unusual and typically short-lived.

INVESTOPEDIA EXPLAINS 'Locked Market'

In a locked market, it may be necessary for exchanges to halt automatic order execution and implement manual order execution because executing orders in a locked market is prohibited. Securities and Exchange Commission regulations require national exchanges to not even display quotes that indicate a locked market. The SEC considers a locked market to violate fair and orderly market rules, which requires that buyers and sellers receive the next and best available prices when trading securities.

RELATED TERMS
  1. Nasdaq

    A global electronic marketplace for buying and selling securities, ...
  2. Spread

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

    The price a seller is willing to accept for a security, also ...
  4. Crossed Market

    A situation arising when the bid price of a security exceeds ...
  5. Bid-Ask Spread

    The amount by which the ask price exceeds the bid. This is essentially ...
  6. Bid

    1. An offer made by an investor, a trader or a dealer to buy ...
RELATED FAQS
  1. Why are the bid prices of T-bills higher than the ask prices? Aren't bids supposed ...

    Yes, you are correct that the ask price of a security should typically be higher than the bid price. This is because people ... Read Full Answer >>
  2. What do the "BxA" numbers on my brokerage's trading screen mean?

    The letters 'B' and 'A' in the notation BxA refer to bid and ask, respectively. When you look at online stock quote data, ... Read Full Answer >>
  3. What role does the Inspector General play with the Securities and Exchange Commission?

    The inspector general of the U.S. Securities and Exchange Commission (SEC) oversees, audits and conducts investigations of ... Read Full Answer >>
  4. How long does it take to execute an M&A deal?

    Even the simplest merger and acquisition (M&A) deals are challenging. It takes a lot for two previously independent enterprises ... Read Full Answer >>
  5. How is trading volume regulated by the Securities and Exchange Commission (SEC)?

    The U.S. Securities and Exchange Commission (SEC) has trading volume as a requirement for selling securities that are otherwise ... Read Full Answer >>
  6. What do I do if I think an accountant is in violation of the Generally Accepted Accounting ...

    The Financial Accounting Standards Board (FASB) promulgates generally accepted accounting principles (GAAP) in the United ... Read Full Answer >>
Related Articles
  1. Investing Basics

    The Dirt On Delisted Stocks

    Listed securities are "the cream of the crop". Find out how a firm can lose that status and why you should be wary.
  2. Investing Basics

    Earn More Profit With Less Trading

    Avoiding overtrading can save your money and your sanity. Find out how to slow your turnover and build your profits.
  3. Investing Basics

    The Basics Of The Bid-Ask Spread

    The bid-ask spread is essentially a negotiation in progress. To be successful, traders must be willing to take a stand and walk away in the bid-ask process through limit orders.
  4. Professionals

    Is a Google Robo-Advisor on the Horizon?

    It's possible that Google is looking to get into the robo-advisor business, either as a new venture or as a way to provide more benefits to employees.
  5. Investing Basics

    Is Your Broker Churning Your Account?

    Is your broker churning your account to generate fees? Here's how to know and what recourse you have.
  6. Investing

    Why We Need Antitrust Laws

    A look at antitrust laws in the United States and the many anticompetitive practices they safeguard against.
  7. Trading Strategies

    IPO Flippers And The Companies Who Hate Them

    Learn how flipping activity affects an initial public offering.
  8. Professionals

    SEC to Advisors: Implement Cybersecurity Plans

    Advisors need to take heed of new SEC guidelines to beef up cybersecurity. Here's what they look like and what some firms are doing.
  9. Taxes

    Gay Weddings Mean Big Business

    The coming boom in same sex marriages represents a money-making opportunity for anyone in the wedding industry.
  10. Fundamental Analysis

    How Patent Trolls Hurt Competition

    Patent trolls are known to have a negative impact on the overall business ecosystem. Investopedia explores how.

You May Also Like

Hot Definitions
  1. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  2. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  3. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  4. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  5. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  6. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!