Definition
The term National Best Offer refers to the lowest available ask price, which is a consolidated value from all of the national stock exchanges. The National Best Offer is the lowest price sellers are willing to accept for a security such as a stock.
Explanation
The National Best Offer, or NBO, is updated throughout the day. It provides investors with the lowest available ask price for a specific security. This is the lowest price that a dealer, or other prospective seller, is willing to accept as payment for a security.
The NBB is a consensus price, since the value is consolidated from all of the major exchanges as well as market makers. For example, the Consolidated Quotation System (CQS) provides an electronic service that provides the NBO information for stocks traded on the New York Stock Exchange, regional exchanges in the United States, as well as issues traded by the Financial Industry Regulatory Authority.
The Securities and Exchange Commission (SEC) requires brokers to guarantee customers this price. Unfortunately, enforcement of the SEC's Regulation NMS is problematic,since the volume and pace of trades today make it difficult to prove an investor actually received the lowest available ask price on their trade.
Related Terms
All-or-None, Fill-or-Kill, Good-Til-Canceled, Immediate-or-Cancel, stop order, National Best Bid, market order, limit order, day order
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