Financial

Normal Market Size

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Normal Market Size (NMS)

A system that categorizes the size of transactions that are normal for a particular security and forces market makers to deal within these sizes.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Normal Market Size

The number of shares in a publicly-traded company that can be traded at a given price. The normal market size is a set number determined by the stock's market capitalization. Market makers must trade within the parameters of the normal market size. If a market maker wants to buy or sell more shares than the normal market size, he/she must negotiate a new price. The normal market size exists to keep particularly large orders from affecting the share price, thus reducing volatility.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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Member States agreed that the threshold for the quoting obligation of "large in scale compared to normal market size" would be dropped and replaced instead with the European Parliament definition of "standard market size".
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