A market is locked if the bid price equals the ask price. This can occur, for example, if the market is brokered and one side pays brokerage only, in over-the-counter trading the initiator of the transactions. Highly competitive market environment with inside bid and offering at the same price. Often occurs when an OTC dealer has not updated the market.
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A situation in which a security has no bid-ask spread. That is, the bid and the ask in a locked market are identical. A locked market is both a temporary phenomenon and relatively uncommon. When it occurs, it usually happens with NASDAQ securities in trading before the open.
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A somewhat unusual occurrence in which the bid price and ask price for a security are equal.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.