Series 66: 6.1.2.1. Inside Market

6.1.2.1. Inside Market

The inside market is the highest bid and the lowest ask offered on the Nasdaq system. The inside market represents the best prices that Nasdaq has to offer for clients on a specific security. The inside market is sometimes known as the inside quote and the best bid and offer (BBO). The inside market does not include the markup or markdown that a market maker may charge.

Example: Imagine the following information is displayed in the Nasdaq Market Center, Level II screen, for Microsoft (MSFT):

The inside market would be 20.25 – 20.75, because 20.25 is the highest bid and 20.75 is the lowest ask. A customer who puts in an order to sell 100 shares will sell her shares at 20.25. A customer who puts in a market order to buy 100 shares will buy the shares at 20.7