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.

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.
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Due to the mega size order, the market size of rooftop will have a spike in 2011, and will fall back to the normal market size in 2012 and onward," Chiang said.
For many traders Christmas typically sees lower market volumes, which means that when trades are made above normal market sizes, this can make the markets even more volatile.