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National best bid and offer (NBBO)

The highest bid and lowest offer available across all US protected equity venues at a moment in time, forming the reference price the whole market is measured against.

Sixteen-plus US options exchanges quote the same series. The NBBO is the best bid on any of them against the best offer on any of them, and orders must be routed so they do not trade through it.

For a trader this means the quote on one venue is not the market. Your platform should show the consolidated NBBO, and a broker routing poorly can still fill you at the NBBO while missing price-improvement available in an auction.

Example: exchange A quotes 1.20 / 1.30, exchange B quotes 1.24 / 1.32, exchange C quotes 1.18 / 1.27. The NBBO is 1.24 / 1.27 — tighter than any single venue, and the worst price a marketable order should receive.

Related: mid-price, price-improvement, bid-ask-spread

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