A security is a proof of ownership, of bonds, stocks or other
investments. Further a security is, in essence, a piece of paper
that can be appointed a value and then later, traded. The term security
covers stock, bonds, futures, and myriad other financial
property. The highest price an investor is ready to pay for a
security is referred to as a bid. A locked market can occur when
an investor’s bid is equivalent to the asking price. An example of such
an occurrence is when the market is brokered and only one party (often
the initiator of the transaction) pays the brokerage. A locked market
can result in a no bid ask spread. A bid ask spread is a
variation between the asking price and the bidding price of the stock
being traded. For instance, if you were to bid $70.00 and the ask
price was $67.00, the bid ask price would be equivalent to $3.00.
A no bid ask spread results when there is absolutely no difference
between the bid and the ask price.
A locked market is a temporary situation that arises within a market
and results in what is called a no bid-spread. Also bear in mind
that a locked market is not something that occurs frequently. A
locked market often takes place when stocks that are volatile
experience a sudden rise in trading volume. Volatility
refers to a numerical gauging of the propensity of a particular
security to change sharply and quickly, either up and down over time.
Occurrences that result in a locked market are often rectified
rapidly. Further, a locked market is often fixed after successive
trades are completed. This rather unusual occurrence most often
arises on the NASDAQ exchange, especially with orders that are
submitted before the opening bell rings. If you are looking for
locked in quotes, many websites offer real time stock quotes.
Cybertrader is one such website, run by the Charles Schwab
Company. You can view the site at the following url:
http://www.cybertrader.com/TradingMarkets/Equities/RealTimeQuotes.aspx
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