Inside market

Inside market,

Definition of Inside market:

  1. The inside market is the spread between the highest bid price and lowest ask price among various market makers in a particular security. Typically, price quotes between market makers feature a lower ask and a higher bid than the quotes made to retail investors in the same security.

  2. The inside market bid is referred to as the inside bid, and the inside market ask is referred to as the inside ask or offer.

  3. The bid and ask prices at which securities are traded between market makers. The inside market is typically transacted at a higher bid or lower ask than where a market maker would be willing to sell the same securities to a retail customer.

How to use Inside market in a sentence?

  1. The inside price is the highest bid and lowest offer in a security. Historically this was provided by a market maker, but in the electronic trading age, it may be created by other participants as well.
  2. The inside price creates the spread between the bid and ask. Bids below and asks above the inside price appear on the order book or Level II.
  3. If a bid/offer is fully removed or fully filled, the next highest bid or lowest offer becomes part of the inside market price.

Meaning of Inside market & Inside market Definition