National Market System - NMS

AAA

DEFINITION of 'National Market System - NMS'

A system with two main functions:

1. To facilitate trading of OTC stocks whose size, profitability, and trading activity meet specific criteria.

2. To post prices for securities on the NYSE and other regional exchanges simultaneously, allowing investors to obtain the best price.

INVESTOPEDIA EXPLAINS 'National Market System - NMS'

The National Market System is sponsored by both the NASD and the Nasdaq. Compared to other OTC stocks, OTC stocks trading under the NMS system have a more comprehensive listing within newspapers.

RELATED TERMS
  1. Nasdaq

    A global electronic marketplace for buying and selling securities, ...
  2. Over-The-Counter - OTC

    A security traded in some context other than on a formal exchange ...
  3. 19c3 Stock

    Any stock listed on an equity exchange after April 26, 1979. ...
  4. Regulation NMS

    National Market System (NMS) is a set of rules passed by the ...
  5. National Association Of Securities ...

    The NASD was a self-regulatory organization of the securities ...
  6. New York Stock Exchange - NYSE

    A stock exchange based in New York City, which is considered ...
RELATED FAQS
  1. Will technology ever disrupt the role of the custodian bank?

    Custodian banks, along with other financial institutions that hold custodian accounts, are likely to be disrupted but not ... Read Full Answer >>
  2. How do I decide whether a credit card offer is a good deal or not?

    Externalities lead to market failure because the price equilibrium does not accurately reflect the true costs and benefits ... Read Full Answer >>
  3. What is the average range for the price-to-earnings ratio in the electronics sector?

    Investors purchase shares of company stock and other traded securities through capital markets in either primary or secondary ... Read Full Answer >>
  4. What are the benefits and shortfalls of the Herfindahl-Hirschman Index?

    Equity and debt are the two sources of financing accessible in capital markets. The term "capital structure" refers to the ... Read Full Answer >>
  5. How is the short interest of a company related to a short squeeze of a company?

    The short interest is a predictor of whether a company is a short squeeze candidate. Generally, when there is a large fluctuation ... Read Full Answer >>
  6. What is the difference between open interest and volume?

    In the options market, two measurements describe the liquidity and activity of option contracts. Volume is the amount of ... 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. Options & Futures

    Getting To Know The Stock Exchanges

    Here are the answers to all the questions you have about stock exchanges but are too afraid to ask!
  3. Investing Basics

    A Look At Primary And Secondary Markets

    Knowing how the primary and secondary markets work is key to understanding how stocks trade.
  4. Investing Basics

    The Lowdown On Penny Stocks

    Think penny stocks will make you rich? If you don't understand the risks, you could end up penniless.
  5. Trading Systems & Software

    The Global Electronic Stock Market

    The way trading is conducted is changing rapidly as exchanges turn toward automation.
  6. Trading Strategies

    Understanding The Price Vs. Time Equation

    Price and time generate vastly different reward: risk profiles.
  7. Investing

    Too Late To Invest In EM?

    Investors have flocked to developing markets amid continued low U.S. interest rates & hopes of further economic stimulus from emerging world central banks.
  8. Investing

    The Risks & Rewards of Penny Stocks

    Penny stocks can make you a lot of money in a short period of time, but this is a very dangerous game that almost always will leads to losses.
  9. Investing

    How Nasdaq Makes Money

    NASDAQ provides a marketplace which offers money-making opportunities to investors. Investopedia explains how NASDAQ makes money.
  10. Investing

    How The NYSE Makes Money

    We examine how the New York Stock Exchange, the leading US stock exchange, makes money.

You May Also Like

Hot Definitions
  1. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  2. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  3. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  4. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  5. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  6. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
Trading Center