- Market Maker
- A firm or individual that stands ready to buy and sell a particular security on a regular basis, quoting both a bid and an ask price to provide liquidity to the market.
- Bid-Ask Spread
- The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller will accept (ask); it represents a cost of trading and a source of market-maker profit.
- NBBO (National Best Bid and Offer)
- The highest available bid price and the lowest available ask price for a security across all exchanges, which market participants are generally required to honor when executing customer orders.
- Regulation NMS
- An SEC set of rules governing the U.S. national market system, including the Order Protection Rule that prevents trade-throughs by requiring orders to be routed to the venue displaying the best price.
- Short Sale
- The sale of a security the seller does not own, typically borrowed and sold with the intent to repurchase it later at a lower price; profit results if the price declines.
- Regulation SHO
- The SEC regulation governing short selling, including locate and close-out requirements and the alternative uptick (circuit-breaker) rule that restricts short selling in a security that has dropped significantly.
- Limit Order
- An order to buy or sell a security at a specified price or better; it will only execute at the limit price or a more favorable one, but is not guaranteed to fill.
- Trade-Through
- The execution of a trade at a price inferior to a protected quotation displayed on another market venue; Regulation NMS's Order Protection Rule is designed to prevent trade-throughs.
- Consolidated Audit Trail (CAT)
- A comprehensive database that records the lifecycle of orders and trades across U.S. equity and options markets, enabling regulators to track and reconstruct market activity.
- Locate Requirement
- A Regulation SHO rule requiring a broker-dealer to have reasonable grounds to believe a security can be borrowed and delivered before accepting or effecting a short sale order.
- Exam Enrollment Fee
- The cost charged to register for and sit the Series 57 exam, which is 105 US dollars.
- Series 57 (Securities Trader Exam)
- The FINRA qualification exam required to register as a Securities Trader, consisting of 50 scored questions to be completed in 105 minutes with a passing score of 70 percent.