NBBO (National Best Bid and Offer)

Definition

NBBO (National Best Bid and Offer) in plain English

Stocks don't trade in just one place — there are many different exchanges, each with people willing to buy or sell. The NBBO is like scanning every store in town and reporting the single best price on each side: the highest price anyone is currently willing to PAY (the best bid) and the lowest price anyone is willing to SELL for (the best offer). It's the official 'best available deal right now' across the whole country, so no matter which exchange you're on, you can see whether you're getting a fair price. Regulators care because it protects ordinary people from being stuck with a worse price when a better one exists somewhere else.

Learn these first

• Quote Rule
• Spoofing

Related Market Microstructure terms

• Amihud Illiquidity Measure
• Ask (Offer)
• Bid
• Bid–Ask Bounce
• Bid–Ask Spread
• Dealer
• Depth
• Effective Spread
• Inventory Risk
• Lee–Ready Algorithm