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Market structure
43 guides in Finabase Learn
- Arbitrage Profiting from a price difference for the same or equivalent asset in two places by buying the cheap one and selling the dear one.
- Ask price The lowest price a seller is currently willing to accept for a security; buyers who want to trade immediately pay the ask.
- Bid price The highest price a buyer is currently willing to pay for a security; sellers who want to trade immediately receive the bid.
- Bid-ask spread The gap between the best bid and the best ask, an implicit cost paid by anyone who trades immediately at market.
- Block trade A single large trade, conventionally 10,000 shares or more, usually negotiated privately to limit market impact.
- Broker A firm or person that executes buy and sell orders for clients and holds their accounts, in exchange for fees or other revenue.
- Broker-dealer A firm registered with the SEC and FINRA that trades securities for customers (broker) and for its own account (dealer).
- Circuit breaker An exchange-wide trading halt triggered when the S&P 500 falls 7%, 13% or 20% in a day, giving markets time to pause.
- Custodian A financial institution that holds customers' securities and cash for safekeeping and handles settlement and record-keeping.
- Dark Pool A private trading venue that does not display orders publicly before execution, used mainly by institutions for large trades.
- Efficient Market Hypothesis (EMH) The theory that prices quickly reflect available information, so consistently beating the market after costs is very hard.
- FINRA The Financial Industry Regulatory Authority, the self-regulatory organization that oversees US broker-dealers under the SEC.
- Float The number of a company's shares available for public trading, excluding shares held by insiders and restricted holders.
- Foreign exchange (forex) The global over-the-counter market for trading currencies, the largest financial market by daily volume.
- High-frequency trading (HFT) Automated trading that uses very fast computers and data links to place and cancel large numbers of orders in fractions of a second.
- How crypto markets differ from stocks: hours, venues and volatility Why crypto trades 24/7 on fragmented venues with no market-wide halts, how its volatility compares with SPY in a year of daily data, and what spot ETFs changed.
- Institutional investor An organization that invests large pools of money for others, such as pension funds, mutual funds, insurers and endowments.
- Level 2 quotes A market-data view showing the bids and asks at several price levels beyond the best quote, with the size at each.
- Limit up-limit down (LULD) A US mechanism that pauses trading in a single stock when its price moves outside a percentage band around its recent average.
- Liquidity How quickly and cheaply an asset can be bought or sold without moving its price; deep markets have tight spreads.
- Market maker A firm that continuously quotes both a bid and an ask in a security, providing liquidity and earning the spread.
- Meme stock mania of 2021: GameStop, AMC and the SEC report What drove GameStop and AMC in January 2021, why brokers restricted buying, what the SEC staff report of October 2021 found, and what changed after.
- Nasdaq A US electronic stock exchange, home to many technology companies, and the name of its main indexes such as the Nasdaq-100.
- National best bid and offer (NBBO) The highest bid and lowest ask for a US stock across all exchanges, which brokers must generally execute at or better.
- New York Stock Exchange (NYSE) The largest US stock exchange by listed company value, located at 11 Wall Street in New York and dating to 1792.
- Odd lot An order or trade of fewer than 100 shares, smaller than a standard round lot.
- Order book The list of open buy and sell limit orders for a security at each price level, showing market depth.
- Order routing and best execution: NBBO, Rule 611, PFOF and 606 Where a US stock order goes after you tap buy: the NBBO, Rule 611 order protection, FINRA best execution, payment for order flow and Rule 606/605 reports.
- Over the counter (OTC) Trading in securities that are not listed on a national exchange, arranged through broker-dealer networks such as the OTC Markets tiers.
- Payment for order flow (PFOF) Compensation a broker receives from a market maker for routing customer orders to it, disclosed quarterly in SEC Rule 606 reports.
- Primary market Where new securities are created and sold for the first time, with the cash going to the issuer, as in an IPO or a new bond sale.
- Round lot The standard trading unit for a security, traditionally 100 shares for US stocks; orders smaller than a round lot are odd lots.
- Secondary market Where investors buy and sell existing securities among themselves, such as on stock exchanges, with no money going to the issuer.
- Sell side The banks and brokers that create, underwrite, trade and research securities for clients, and the analysts whose ratings and price targets they publish.
- Settlement The final step of a trade, when the buyer’s cash and the seller’s securities actually change hands; most US stock trades settle one business day later (T+1).
- Stock exchange A regulated marketplace where buyers and sellers trade listed securities, such as the NYSE and Nasdaq.
- Stock exchanges explained: NYSE, Nasdaq and where your order goes How US stock exchanges work, how they differ from dark pools and wholesalers, what listing on the NYSE or Nasdaq requires, and where a retail order really executes.
- The 2010 Flash Crash: what happened on May 6 and what changed How US stocks fell about 9% and rebounded within minutes on May 6, 2010, what the SEC–CFTC staff report found, and how LULD bands and new circuit breakers followed.
- Tick size The smallest price increment in which a security can be quoted or traded; for most US stocks, one cent per share as of 2026.
- Trading halt A temporary stop in trading of a single stock or the whole market, ordered for pending news, extreme price moves or regulatory concerns.
- Trading halts and Limit Up-Limit Down (LULD) pauses explained Why US stocks get halted, how news-pending halts and SEC suspensions differ, and how LULD price bands, limit states and 5-minute pauses work, with examples.
- Trading volume The number of shares or contracts that change hands in a given period, the basic measure of how actively and how liquidly a security trades.
- Underwriter The investment bank that manages a securities offering, sets its price with the issuer and buys or sells the new shares or bonds to investors.
Educational content, not investment advice. Finabase Learn explains how markets and tools work. It does not recommend any security or strategy, and examples are for illustration only. Investing involves risk, including the loss of principal. Rules and figures are for the United States unless stated and can change — check the cited source before you act.