Locked Market


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.

BREAKING DOWN '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.

  1. Nasdaq

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

    A situation arising when the bid price of a security exceeds ...
  3. Spread

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

    The price a seller is willing to accept for a security, also ...
  5. Bid

    1. An offer made by an investor, a trader or a dealer to buy ...
  6. Bid-Ask Spread

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