Stock Market Glossary

Key Industry Terms


The price at which someone is willing to sell a security.

Bear Market

A declining market condition in which the prices of securities are falling.

Best Execution

The obligation of intermediaries to achieve the best possible result when executing customer orders.


The price a buyer is willing to pay for a security.

Bid offer spread

The difference between the bid and offer prices of a security.


An Exchange member firm, which provides advice and dealing services to the public and can deal on its own account.

Bull Market

An advancing market condition in which the prices of securities are rising or expected to rise.

Circuit Breaker

A trading curb that occurs at a point which an individual stock, or in some cases an entire market, will stop trading for a period of time in response to substantial drops in value.

Closing Price

The price at which a security closed for the end of trading on a given day.

Consolidated Tape

The electronic market data feed that reports quote and execution transactions from all registered national stock exchanges in the U.S. A consolidated tape does not exist in Europe.

Continuous Trading

The period of a trading day when orders are matched and executed against one another.


The participant with whom a trade is being transacted.

Depositary receipt

Commonly known as 'DRs', Depositary Receipts are negotiable certificates that enable domestic investors to own shares in foreign companies.


An electronic communication network (ECN) is an electronic system in the U.S., similar to a stock exchange, that facilitates trading of financial products. An ECN is also sometimes called an alternative trading system (ATS).

Efficient financial market

A market that offers transparency, liquidity, low transaction costs and price movements.

Electronic Order Book

An automatic execution facility operated by the Exchange. Order books facilitate the trading of order book securities.


The risk-sharing part of a company's capital, usually made up of ordinary shares.


ESMA is the European Securities and Markets Authority, an independent European Union Authority that contributes to safeguarding the stability of the European Union's financial system by ensuring the integrity, transparency, efficiency and orderly functioning of securities markets, as well as enhancing investor protection.

European Best Bid and Offer (EBBO)

The European equivalent of the National Best Bid and Offer (NBBO) in the U.S. The EBBO refers to the current best prices available for selling or buying a trading instrument such as a stock.

Exchange Traded Fund

Fund that seeks to match the returns of an index. ETFs are traded on a regulated market. Also known as tracker funds or trackers.

Financial Conduct Authority (FCA)

An independent body which regulates the financial services industry in the UK.


A benchmark against which financial or economic performance is measured, such as the Bats 1000 Index, Dow Jones Industrial Average or the S&P 500.


Initial Public Offering – the first public issue of a stock from a company or other entity that has not previously been publicly traded.

Last trade price

The most recent price at which a specific security was traded.

Limit Order

An order to buy or sell at a specific price or better. Limit buy orders are executed at or below the specified order price. Limit sell orders are executed at or above the specified order price.

Limit Up/Limit Down

A U.S. equity market-wide mechanism intended to address extraordinary market volatility in stock trading. Limit up/Limit down is designed to prevent trades in individual stocks from occurring outside of specified price bands.


The degree to which an asset or security can be bought and sold in the market without affecting the asset’s price. Assets that can be easily bought or sold are known as liquid assets.

Liquid security

A security that has a sufficient number of buyers and sellers. Liquid securities can be easily traded on the Exchange.

Liquidity provider

A market participant that is obliged to buy and sell securities that it is registered in. In the process, it facilitates trading and improves liquidity in those securities.

Market Maker

A stock exchange member who provides liquidity for securities by buying and selling for its own account, generally using computers and algorithms.

Market Order

An order that is executed as quickly as possible at the best price available.

Market price

The price of a security. For shares, there are two prices quoted on the exchange – bid price and offer price.

Markets in Financial Instruments Directive (MiFID)

A European Union law that provides harmonised regulation for investment services across the 31 member states of the European Economic Area (EEA).

Member firm

An investment firm which is a member of the Exchange and which may deal in securities on our market on behalf of its clients, or on behalf of the firm itself.

Multilateral Trading Facility (MTF)

The European equivalent to an alternative trading system (ATS), a MTF is operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in securities - in the system and in accordance with non-discretionary rules - in a way that results in a trade.

National Best Bid and Offer (NBBO)

A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.

Regulation National Market System (Reg NMS)

A set of rules passed by the Securities and Exchange Commission (SEC), which looks to improve the U.S. exchanges through improved fairness in price execution as well as improve the displaying of quotes and amount and access to market data. Reg NMS went into practice in 2007.

Odd Lot

An order amount for a security that is less than the normal unit of trading for that particular asset. Odd lots are considered to be anything less than the standard 100 shares for stocks.

Opening Price

The price at which a security opened trading on a given day.


A contract bearing the right, but not the obligation, to buy (for a call option) or sell (for a put option) a specific amount of given stock, commodity, currency, index or other securities, at a specified price (the strike price) during a specified period of time. For stock options, the amount usually represents 100 shares of the underlying stock.


An offer to buy or sell a tradable instrument with a variety of conditions attached. See limit, at best, fill or kill, execute and eliminate and market orders.

Order matching

The process of automatically matching and executing buy and sell orders. Order matching is carried out by the system.

Order routing

The process by which an order goes from the investor to an exchange. An order may go directly to the exchange from the customer, or it may go first to a broker who then routes the order to the exchange. The routing rules usually follow business needs like best execution. (see Best Execution)


An offer to buy or sell a security.

Primary Market

The market for the issue of new securities or underwritings, in which companies offer shares directly to investors.

Recognised Investment Exchange (RIE)

An investment exchange recognised by the U.K. Financial Conduct Authority (FCA). Bats Europe earned RIE status in May 2013.

Retail investor

A private user of the financial markets. The retail investor is typically a small investor, who buys and sells shares through his/her broker.

Rule Book

The rules of the Bats Exchanges.

Secondary Market

The market where investors purchase existing securities or assets from other investors on an exchange rather than from a company itself.


The Securities and Exchange Commission (SEC) regulates the securities market to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.


General name for stocks and shares of all types.


The process of transferring stock from seller to buyer and arranging the corresponding movement of money between the two parties.


The authorised share capital of a company is divided into a number of equal parts. Each part is called a share. (see Securities, Stock)

Short Selling

The sale of a security that is not owned by the seller, or that the seller has borrowed. Short selling is motivated by the belief that a security’s price will decline, enabling it to be bought back at a lower price to make a profit.


A share representing an ownership interest of a particular company or corporation.


A code (usually 1 to 5 letters), used to designate a security for trading on an exchange.

Trading platform

A trading platform is the technology infrastructure in a stock exchange that is used to support one or more trading services.

Transparent market

A market that provides timely and accurate information regarding all transactions.


A group or individual, generally at an investment bank, which assists corporations or other entities in issuing new securities to the public.


A measure of the amount of movement in the price of a financial instrument.


The number of shares traded during a given period. This is also called trading volume.