Series 57 key terms

The highest displayed bid price and lowest displayed offer price across all markets trading a security, used as the reference price for order protection and customer executions.

A single data feed that combines last-sale and quote data from every market in a security, giving traders one record of trading activity across venues.

The full list of displayed bids and offers at each price level in an order book, showing size and price beyond just the best bid and offer.

A condition where a venue's best bid equals (locked) or exceeds (crossed) the best offer elsewhere; rules require the venue to resolve it before displaying quotes.

An order to buy or sell at a specified price or better that may rest in the book until executed, cancelled, or expired.

An order that must execute immediately in whole or in part, with any unexecuted remainder cancelled rather than posted to the book.

An order that becomes a market order once the security trades at or through a specified trigger price.

The volume-weighted average price of a security over a period, calculated by dividing total traded value by total shares traded, often used as an execution benchmark.

Automated software that splits and sends orders to the venues most likely to fill them at the best available price, weighing fees, speed, and fill rates.

A FINRA-operated system through which members report off-exchange executions in exchange-listed securities so the trades appear on the consolidated tape.

FINRA's trade reporting and dissemination system for eligible debt securities, covering corporate bonds, agency debt, and certain structured products.

The standard trading unit for a security, typically 100 shares for equities, used to define minimum displayed quote size and reporting conventions.

The standard US settlement cycle under which most securities transactions settle one business day after the trade date.

An unregistered security resold only to qualified institutional buyers, allowing trading without SEC registration but with limited liquidity and public disclosure.

An SEC-registered electronic system that matches buyers and sellers but is not a national securities exchange; many are dark pools displaying no pre-trade quotes.

The SEC rule set that modernized US equity market structure, addressing order protection, access fees, market data, and sub-penny quoting across trading venues.

Rule 611 of Reg NMS requiring trading centers to prevent execution of orders at prices inferior to a protected quotation displayed by another market.

Rule 612 of Reg NMS prohibiting quoting or accepting orders in increments smaller than one cent for stocks priced at $1.00 or more per share.

Rule 610 of Reg NMS limiting the fee an exchange may charge for accessing its displayed quotations to $0.003 per share.

A market-wide mechanism that pauses trading in an individual stock when its price moves outside predefined percentage bands around a reference price.

A mechanism that temporarily halts all US equity trading when the S&P 500 declines by specified percentages from the prior day's closing price.

SEC rules governing short selling, including locate, close-out, and price-test requirements intended to curb abusive naked short selling.

The alternative uptick rule: after a 10% intraday decline from the prior close, short sales are permitted only at a price above the national best bid.

A broker-dealer must have reasonable grounds to believe a security can be borrowed and delivered before accepting a customer's short sale order.

Securities with significant, persistent fails to deliver; short sales in them require a locate and pre-existing fails must be closed out.

A customer who executes four or more day trades within five business days in a margin account, triggering a $25,000 minimum equity requirement.

FINRA Rule 5310 requiring firms to use reasonable diligence to obtain the most favorable terms reasonably available for customer orders under prevailing market conditions.

FINRA Rule 5270, which bars a firm from trading a security for its own account while holding an unexecuted customer market order, subject to limited exceptions.

FINRA Rule 6460 requiring firms to display customer limit orders priced better than the firm's quote or that increase the size of its quote.

Periodic reporting of the total short position in a security, published to inform the market about the level of outstanding short sales.

A comprehensive regulatory database to which firms report every order event, allowing regulators to reconstruct market activity across venues and participants.

SEC Rule 15c3-1 requiring broker-dealers to maintain minimum liquid capital in proportion to their liabilities and the risk of their business.

SEC Rule 602 requiring market makers to execute orders at their displayed quotations up to the quoted size, subject to limited exceptions.

Compensation a trading venue pays a broker for routing customer orders to it; the arrangement must be disclosed under SEC Rule 606.

A firm's practice of executing customer orders against its own inventory or order flow rather than routing them to an exchange or other venue.

A firm that continuously displays both a bid and an offer in a security and stands ready to trade at those quoted prices.

Trading a firm's own capital for its own account to profit from market movements rather than from customer commissions or spreads.

The exposure a market maker or proprietary trader faces from holding a position whose price may move before it can be offset or sold.