What Is the Concept of the 'National Best Bid and Offer' (NBBO)? ▴ Learn

What Is the Concept of the ‘National Best Bid and Offer’ (NBBO)?

The NBBO represents the highest displayed bid price (the best price a buyer is willing to pay) and the lowest displayed offer price (the best price a seller is willing to accept) across all competing regulated exchanges for a security. It is a regulatory requirement in the US, ensuring that investors receive the best available price when executing a trade.

Execution must occur at a price equal to or better than the NBBO, preventing excessive negative slippage.

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