DEFINITION of 'Price Improvement'

Attaining a higher bid price, if you are selling a stock, or a lower ask price, if you are buying a stock, than the price quoted at the time your order was placed.

BREAKING DOWN 'Price Improvement'

You will often read in brokerage marketing pitches that price improvement is an opportunity and not a guarantee. Although most brokerages purport "fighting for that last 1/16" there is no guarantee of this actually happening.

  1. Bid Tick

    An indication of whether the latest bid price is higher, lower ...
  2. Best Bid

    The highest quoted bid for a particular trading instrument among ...
  3. Ask Size

    The amount of a security that a market maker is offering to sell ...
  4. Bid Size

    The number of shares being offered for purchase at a specified ...
  5. Bid Whacker

    A slang term for an investor who sells shares at or below the ...
  6. Price Transparency

    The accessibility of information on the order flow for a particular ...
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  1. What do the bid and ask prices represent on a stock quote?

    Learn what the bid and ask prices mean in a stock quote. Find out what represents supply and demand in the stock market and ... Read Answer >>
  2. I don't understand how a stock has a trading price of 5.97, but when I buy it I have ...

    It might seem logical that the last traded price of a security is the price at which it would currently be trading, but this ... Read Answer >>
  3. What is the difference between a quote driven market and an order driven one?

    The difference between these two market systems lies in what is displayed in the market in terms of orders and bid and ask ... Read Answer >>
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