{"id":340391,"date":"2025-12-12T11:27:50","date_gmt":"2025-12-12T11:27:50","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/locked-crossed-and-barrel-nasdaq\/"},"modified":"2025-12-12T11:27:50","modified_gmt":"2025-12-12T11:27:50","slug":"locked-crossed-and-barrel-nasdaq","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=340391","title":{"rendered":"Locked, Crossed and Barrel | Nasdaq"},"content":{"rendered":"


\n<\/p>\n

\n

There\u2019s been a lot of discussion lately around market structure regulatory reforms and what they mean for market participants. One topic that stood out was the role of the National Best Bid and Offer (NBBO) at the recent Order Protection Rule roundtable<\/a>.\u00a0<\/p>\n

As part of that conversation, several participants raised questions about locked and crossed markets \u2014 what they are, why they happen, and why they matter? In this blog, we\u2019ll break down these concepts and explain their significance to investors.<\/p>\n

What? When? Why?<\/strong><\/h2>\n

A locked market<\/strong> occurs when the best bid and best offer are equal across different exchanges. For example, a buyer on one exchange wants to pay $10, but a seller on another exchange is willing to sell for $10, and yet no trade is happening.<\/p>\n

A crossed market<\/strong> happens when the best bid is higher than the best offer. For example, a buyer on one exchange wants to pay $10, but a seller on another exchange is willing to sell for $9.99, and still no trade is happening.<\/p>\n

Rule 611 of Regulation NMS<\/a>, also known as the \u201corder protection rule,\u201d requires exchanges and other trading venues to prevent trade throughs. That is meant to ensure all investors trade at the best prices available in the market, regardless of which exchange has that quote.\u00a0<\/p>\n

In addition, Rule 610 requires exchanges, which advertise prices, to avoid locking and crossing markets with their displayed quotes.<\/p>\n

However, that doesn\u2019t mean the NBBO itself can\u2019t appear locked or crossed.\u00a0<\/p>\n

In fact, when we look at S&P 500 stocks, we see that, on average, each stock is locked for around 2.5 seconds each day. Although, importantly, markets are crossed far less \u2013 with an average of just 4.2 milliseconds each day.<\/p>\n

Chart 1: Locked and crossed markets are rare and last for a small fraction of the trading day<\/strong><\/p>\n

\n
\n
\n\"Locked<\/p>\n<\/picture><\/div>\n<\/p><\/div>\n<\/p><\/div>\n

The spread matters!\u00a0<\/strong><\/h2>\n

Importantly, not all stocks are average!<\/p>\n

In fact, what the data shows is that it is much more likely that a tick-constrained<\/a> stock will be locked more often. As the data in Chart 2 also shows, lower-priced stocks<\/a> are more likely to be tick constrained.<\/p>\n

That should be no surprise. After all, a tick-constrained stock is already all but 1 cent away from being locked \u2013 and typically has even more depth and longer queues than other stocks.\u00a0<\/p>\n

In contrast, the data shows that higher-priced stocks usually have wider spreads with multiple cents (ticks) between the bid and offer. As traders can improve prices by several ticks without hitting the far touch, it is much less likely that a quote improvement will lock the market.<\/p>\n

Chart 2: Bid-ask spreads are intimately correlated to locked and crossed quotations. The tighter the spread, the stronger chance to observe a locked or crossed quotation.<\/strong><\/p>\n

\n
\n
\n\"Bid-ask<\/p>\n<\/picture><\/div>\n<\/p><\/div>\n<\/p><\/div>\n

Another conclusion we can draw from this data is that the U.S. Securities and Exchange Commission\u2019s (SEC) proposed minimum tick size<\/a> change (where tick-constrained stocks would have half-cent ticks) should reduce the number of locked and crossed quotes in the most affected stocks\u00a0\u00a0<\/p>\n

How long do locked markets stay locked?<\/strong><\/h2>\n

The data above shows the total duration of locked and crossed markets per stock. In short \u2013 this proves locks and crossed markets do happen.<\/p>\n

But from the perspective of whether OPR works (or is still needed in an all-electronic market), it is also important to understand how long each one typically lasts.<\/p>\n

The data shows it is brief, but not \u201cdeminimus.<\/a>\u201d On average, the locked markets last 5.5 milliseconds<\/a>, while crossed markets exist for an even shorter time, just 0.8 milliseconds.<\/p>\n

Chart 3: Locked & Crossed are corrected very quickly<\/strong><\/p>\n

\n
\n
\n\"Locked<\/p>\n<\/picture><\/div>\n<\/p><\/div>\n<\/p><\/div>\n

Some locks might only happen on the SIP\u00a0<\/strong><\/h2>\n

It’s also important to understand that messages take around 0.2 milliseconds to travel from one venue to another. That means even though the SIP shows a lock or cross, it might not be true in other locations<\/a>.<\/p>\n

For example, locked markets seem to indicate that arbitrage profits are available. However, academics<\/a> who accounted for how long it would take even the fastest traders to route orders to capture the trades find that crossed markets are mostly gone before their order can trade.<\/p>\n

Holsten, Pierson and Wu (2023)<\/a> looked at this in detail. Using exchange timestamps from the SIP, they reconstructed what the NBBO would have looked like in Mahwah, Secaucus and Carteret after adjusting for latency. They found that once latency is factored in, trades matched to locked spreads drop by about 80% (blue line below). That suggests that geographic latency may actually explain a lot of the locked and crossed quotes we see here today.<\/p>\n

Chart 4: The number of locked and crossed quotes drops significantly once we account for geographic latency<\/strong><\/p>\n

\n
\n
\n\"The<\/p>\n<\/picture><\/div>\n<\/p><\/div>\n<\/p><\/div>\n

What does this mean?<\/strong><\/h2>\n

With the SEC thinking about the economics of the NBBO, and some institutions even suggesting that we might not need an NBBO at all, data like this is important.\u00a0<\/p>\n

This analysis shows that markets do lock (and sometimes cross), but current rules mostly make the NBBO return unlock much faster than a human can blink. We also have evidence that market makers and arbitrageurs act very quickly to uncross markets.<\/p>\n

What we can\u2019t know is what happens if the Order Protection Rule goes away. Locks could become more common, especially if traders want to avoid take fees, but retain queue position on resting orders. A secondary question is whether, in a market like that, midpoint orders, price improvement and 605 metrics still make sense.<\/p>\n

These are important questions for market participants and the SEC to weigh as they rethink Regulation NMS.\u00a0<\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":"

There\u2019s been a lot of discussion lately around market structure regulatory reforms and what they mean for market participants. One topic that stood out was the role of the National Best Bid and Offer (NBBO) at the recent Order Protection Rule roundtable.\u00a0 As part of that conversation, several participants raised questions about locked and crossed […]<\/p>\n","protected":false},"author":1,"featured_media":325760,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[93],"tags":[5248,47491,50926,34885],"dealstore":[],"offerexpiration":[],"class_list":["post-340391","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-barrel","tag-crossed","tag-locked","tag-nasdaq"],"yoast_head":"\nLocked, Crossed and Barrel | Nasdaq - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=340391\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Locked, Crossed and Barrel | Nasdaq - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"There\u2019s been a lot of discussion lately around market structure regulatory reforms and what they mean for market participants. One topic that stood out was the role of the National Best Bid and Offer (NBBO) at the recent Order Protection Rule roundtable.\u00a0 As part of that conversation, several participants raised questions about locked and crossed […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fivemor.com\/?p=340391\" \/>\n<meta property=\"og:site_name\" content=\"Som2ny Network\" \/>\n<meta property=\"article:published_time\" content=\"2025-12-12T11:27:50+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/12\/Nasdaq20default20share20image.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"948\" \/>\n\t<meta property=\"og:image:height\" content=\"501\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/fivemor.com\/?p=340391#article\",\"isPartOf\":{\"@id\":\"https:\/\/fivemor.com\/?p=340391\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371\"},\"headline\":\"Locked, Crossed and Barrel | Nasdaq\",\"datePublished\":\"2025-12-12T11:27:50+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/fivemor.com\/?p=340391\"},\"wordCount\":920,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/fivemor.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/fivemor.com\/?p=340391#primaryimage\"},\"thumbnailUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/12\/Nasdaq20default20share20image.jpg\",\"keywords\":[\"barrel\",\"Crossed\",\"Locked\",\"NASDAQ\"],\"articleSection\":[\"Finance\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/fivemor.com\/?p=340391#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fivemor.com\/?p=340391\",\"url\":\"https:\/\/fivemor.com\/?p=340391\",\"name\":\"Locked, Crossed and Barrel | Nasdaq - Som2ny Network\",\"isPartOf\":{\"@id\":\"https:\/\/fivemor.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/fivemor.com\/?p=340391#primaryimage\"},\"image\":{\"@id\":\"https:\/\/fivemor.com\/?p=340391#primaryimage\"},\"thumbnailUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/12\/Nasdaq20default20share20image.jpg\",\"datePublished\":\"2025-12-12T11:27:50+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/fivemor.com\/?p=340391#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/fivemor.com\/?p=340391\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fivemor.com\/?p=340391#primaryimage\",\"url\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/12\/Nasdaq20default20share20image.jpg\",\"contentUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/12\/Nasdaq20default20share20image.jpg\",\"width\":948,\"height\":501},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/fivemor.com\/?p=340391#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/fivemor.com\/?bp_activities=1\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Locked, Crossed and Barrel | Nasdaq\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/fivemor.com\/#website\",\"url\":\"https:\/\/fivemor.com\/\",\"name\":\"Som2ny Network\",\"description\":\"Daily Deals\",\"publisher\":{\"@id\":\"https:\/\/fivemor.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/fivemor.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/fivemor.com\/#organization\",\"name\":\"Som2ny Network\",\"url\":\"https:\/\/fivemor.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png\",\"contentUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png\",\"width\":300,\"height\":86,\"caption\":\"Som2ny Network\"},\"image\":{\"@id\":\"https:\/\/fivemor.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png\",\"caption\":\"admin\"},\"sameAs\":[\"https:\/\/fivemor.com\"],\"url\":\"https:\/\/fivemor.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Locked, Crossed and Barrel | Nasdaq - Som2ny Network","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/fivemor.com\/?p=340391","og_locale":"en_US","og_type":"article","og_title":"Locked, Crossed and Barrel | Nasdaq - Som2ny Network","og_description":"There\u2019s been a lot of discussion lately around market structure regulatory reforms and what they mean for market participants. One topic that stood out was the role of the National Best Bid and Offer (NBBO) at the recent Order Protection Rule roundtable.\u00a0 As part of that conversation, several participants raised questions about locked and crossed […]","og_url":"https:\/\/fivemor.com\/?p=340391","og_site_name":"Som2ny Network","article_published_time":"2025-12-12T11:27:50+00:00","og_image":[{"width":948,"height":501,"url":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/12\/Nasdaq20default20share20image.jpg","type":"image\/jpeg"}],"author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/fivemor.com\/?p=340391#article","isPartOf":{"@id":"https:\/\/fivemor.com\/?p=340391"},"author":{"name":"admin","@id":"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371"},"headline":"Locked, Crossed and Barrel | Nasdaq","datePublished":"2025-12-12T11:27:50+00:00","mainEntityOfPage":{"@id":"https:\/\/fivemor.com\/?p=340391"},"wordCount":920,"commentCount":0,"publisher":{"@id":"https:\/\/fivemor.com\/#organization"},"image":{"@id":"https:\/\/fivemor.com\/?p=340391#primaryimage"},"thumbnailUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/12\/Nasdaq20default20share20image.jpg","keywords":["barrel","Crossed","Locked","NASDAQ"],"articleSection":["Finance"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/fivemor.com\/?p=340391#respond"]}]},{"@type":"WebPage","@id":"https:\/\/fivemor.com\/?p=340391","url":"https:\/\/fivemor.com\/?p=340391","name":"Locked, Crossed and Barrel | Nasdaq - Som2ny Network","isPartOf":{"@id":"https:\/\/fivemor.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/fivemor.com\/?p=340391#primaryimage"},"image":{"@id":"https:\/\/fivemor.com\/?p=340391#primaryimage"},"thumbnailUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/12\/Nasdaq20default20share20image.jpg","datePublished":"2025-12-12T11:27:50+00:00","breadcrumb":{"@id":"https:\/\/fivemor.com\/?p=340391#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/fivemor.com\/?p=340391"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fivemor.com\/?p=340391#primaryimage","url":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/12\/Nasdaq20default20share20image.jpg","contentUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/12\/Nasdaq20default20share20image.jpg","width":948,"height":501},{"@type":"BreadcrumbList","@id":"https:\/\/fivemor.com\/?p=340391#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/fivemor.com\/?bp_activities=1"},{"@type":"ListItem","position":2,"name":"Locked, Crossed and Barrel | Nasdaq"}]},{"@type":"WebSite","@id":"https:\/\/fivemor.com\/#website","url":"https:\/\/fivemor.com\/","name":"Som2ny Network","description":"Daily Deals","publisher":{"@id":"https:\/\/fivemor.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/fivemor.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/fivemor.com\/#organization","name":"Som2ny Network","url":"https:\/\/fivemor.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fivemor.com\/#\/schema\/logo\/image\/","url":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png","contentUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png","width":300,"height":86,"caption":"Som2ny Network"},"image":{"@id":"https:\/\/fivemor.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fivemor.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png","caption":"admin"},"sameAs":["https:\/\/fivemor.com"],"url":"https:\/\/fivemor.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/posts\/340391","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=340391"}],"version-history":[{"count":0,"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/posts\/340391\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/media\/325760"}],"wp:attachment":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=340391"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=340391"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=340391"},{"taxonomy":"dealstore","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fdealstore&post=340391"},{"taxonomy":"offerexpiration","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fofferexpiration&post=340391"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}