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Crossed Market |
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Crossed market In the context of general equities, happens when the inside market consists of a highest bid price that is higher than the lowest offer price. See: Overlap the market. Crossed Market A situation in which the bid for a security exceeds the ask. That is, a crossed market occurs when the highest price that a buyer is willing to pay is higher than the lowest price a seller is willing to take. This is fairly unusual and characterizes a highly volatile security. A crossed market is most common on NASDAQ when orders are entered before the opening.
Crossed market. A market in a particular stock or option is described as crossed when a bid to buy that stock or option is higher than the offer to sell it, or when an offer to sell is lower than a bid to buy. A crossed market reverses the normal relationship of a stock quotation in which the bid price is always lower than the ask price. It's illegal for market makers to cross a market deliberately. A crossed market may occur when investors place after-hours orders electronically for execution at opening, or when investors trade directly through an electronic communications network (ECN). NASD has introduced a set of pre-opening procedures for market makers on the Nasdaq Stock Market. They help prevent the confusion and potential inequalities in pricing that a crossed market can produce. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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