The National Best Bid and Offer (NBBO) is the U.S. national-market benchmark formed from the highest displayed bid and the lowest displayed offer used in the applicable NMS framework. NBBO is a U.S. market-structure term and should not be generalized into a universal global best-price concept or confused with one venue’s local best bid and offer.
ReviewedEvidence1 sourceSectionPhrases & Idioms
Quick answer
The National Best Bid and Offer (NBBO) is the U.S. national-market benchmark formed from the highest displayed bid and the lowest displayed offer used in the applicable NMS framework.
Key details
Canonical Formnational best bid and offer
Core MeaningThe National Best Bid and Offer (NBBO) is the U.S. national-market benchmark formed from the highest displayed bid and the lowest displayed offer used in the applicable NMS framework.
Further guidance
History Boundary
Current authoritative financial meaning is published without claiming an exact inventor, coinage date, or absolute first use.
Meaning
The National Best Bid and Offer (NBBO) is the U.S. national-market benchmark formed from the highest displayed bid and the lowest displayed offer used in the applicable NMS framework.
Usage Boundary
NBBO is a U.S. market-structure term and should not be generalized into a universal global best-price concept or confused with one venue’s local best bid and offer.
Sources and evidence
Sources are shown with the role they play in this guide. Historical or style-sensitive claims are kept within the evidence boundary described above.
Under current U.S. Regulation NMS definitions, best bid and best offer mean the highest-priced bid and the lowest-priced offer. Treat this as a U.S. securities-regulation definition. Do not collapse it into the NBBO concept or generalize it to every use of best price outside this rule context.
Under current U.S. Regulation NMS, a “bid or offer” is the bid price or offer price communicated by an exchange or association member to a broker, dealer, or customer at which it is willing to buy or sell one or more round lots of an NMS security as principal or agent; indications of interest are excluded. Keep this definition tied to 17 CFR § 242.600; everyday uses of bid and offer and other market-rule definitions can differ.
Under current U.S. Regulation NMS definitions, published bid and published offer are the bid and offer quotations of a national securities exchange or national securities association that are communicated to a securities information processor. The rule defines the bid and offer jointly. Keep them in one canonical and do not split them into competing standalone pages.
Regulation NMS defines best available displayed price by comparing the national best quote with the best disseminated odd-lot order on the relevant side, with a timing rule for midpoint-or-better limit orders. This is a U.S. Regulation NMS term with side- and timing-specific conditions; do not reduce it to a generic synonym for the best visible market price.
A bid-ask spread is the gap between quoted buying and selling prices and is one market-liquidity measure; wider spreads generally imply greater trading cost or compensation for liquidity provision. Treat the spread as one dimension of liquidity, not as a complete measure of market liquidity, depth, or price impact.
A national market system plan approved by the Securities and Exchange Commission, temporarily or permanently, pursuant to § 242.608. Keep the approval and § 242.608 scope in the definition; this is not a generic label for any market-system operating plan.
Executed Outside the Best Available Displayed Price is a current Regulation NMS defined term. This guide preserves the rule-specific benchmark and direction instead of replacing it with informal trading shorthand.
