Trading and Markets Glossary · Investing

0DTE (zero days to expiration): an option bought or sold on its expiration day; a majority of US index option volume by 2026 (Options).
23/5 trading: exchange trading of NMS stocks 23 hours a day, five days a week, with an overnight session from 8:00 pm to 4:00 am ET and a one-hour pause from 8:00 to 9:00 pm Monday to Thursday, planned from December 6, 2026 (Extended Hours & 24-Hour Trading).
30.7 secured amount: the separate pool an FCM holds for customers trading on foreign futures exchanges (Futures & FCMs).
Access fee cap: the most an exchange may charge to execute against its protected quotations under Rule 610(c): $0.003 a share today, $0.001 a share (0.1% of the quote below $1.00) once the 2024 amendments take effect in November 2027 (US Equity Market Structure).
After-hours session: exchange and ATS trading from 4:00 pm to 8:00 pm ET, limit orders only on most venues (Extended Hours & 24-Hour Trading).
Alternative trading system (ATS): a trading system operated by a broker-dealer under Regulation ATS rather than registered as an exchange; an NMS Stock ATS needs an effective Form ATS-N (US Equity Market Structure).
American-style option: an option that can be exercised on any business day up to expiration, so a short position can be assigned early (Options).
Assignment: OCC's notice that an exercise has been matched to a short position, allocated by the clearing firm to a customer first in first out or at random (Options).
Best execution: a broker's duty under FINRA Rule 5310 to use reasonable diligence to find the best market for a customer's order so the price is as favorable as possible under prevailing conditions (Order Routing, PFOF & Best Execution).
Best odd-lot order: the highest-priced odd-lot bid above the national best bid, or lowest-priced odd-lot offer below the national best offer, added to odd-lot information by the 2024 amendments (US Equity Market Structure).
Book checksum: a hash of a venue's top book levels sent with its feed (Kraken's CRC32 of the top 10 levels) so a client can prove its rebuilt book matches the venue's (Market Data).
Borrow fee: the annualized rate a short seller pays to borrow shares, charged daily on the short's value (Alpaca and Robinhood divide by 360) (Margin & Short Selling).
Cancel/replace race: a cancel or replace request that crosses a fill in flight, so the venue applies it to a partly or fully filled order; FIX replaces state the total quantity to avoid doubling a position (Orders & Order Types).
Candle: the open, high, low, close and volume of trades in an interval, identified by its open time and recomputable when late, busted or corrected trades change it (Market Data).
ClOrdID chain: the FIX client order IDs linking an order to its replacements; each replace carries a new ClOrdID and OrigClOrdID naming the previous non-rejected order (Orders & Order Types).
Closing auction: the single-price auction that sets a listed stock's official close, with entry and cancel cutoffs (3:50 p.m. ET at NYSE) and imbalance messages before it (US Equity Market Structure).
Collar (market order): a broker's conversion of a market order into a limit order some distance from the quote so it can't fill through a thin book; a material term the customer must be told (Orders & Order Types).
Conflation: sending each client only the latest state per symbol at the client's rate rather than every update, correct for quotes and charts, wrong for consumers that need every event (Market Data).
Contrary Exercise Advice: the form a member submits by 7:30 p.m. ET on expiration day to exercise or not exercise a customer's expiring option against the exercise-by-exception default (Options).
Covered call: a short call against 100 shares held per contract; income now, upside capped at the strike (Options).
CT Plan: the single consolidated equity data plan, effective November 20, 2024, that on implementation replaces the CTA, CQ and UTP plans (US Equity Market Structure).
Day margin: an FCM's lower margin for a futures position opened and closed within a session, ending at a set time before the close (Futures & FCMs).
Derivatives clearing organization (DCO): a CFTC-registered clearing house that becomes the counterparty to every cleared futures trade, sets margin and settles with clearing members at least once each business day (Futures & FCMs).
Designated contract market (DCM): a CFTC-registered futures exchange, which lists contracts by self-certification or approval (Futures & FCMs).
Direct feed: an exchange's own market data product, with depth or order-by-order detail, that reaches a subscriber without the hop through the SIP (US Equity Market Structure).
Early assignment: assignment of an American-style short option before expiration, most often on a call the day before an ex-dividend date when the dividend exceeds its time value (Options).
Effective spread: twice the distance between a fill price and the NBBO midpoint at order receipt; divided by the quoted spread it gives E/Q, the share of the spread the customer paid (Order Routing, PFOF & Best Execution).
Event contract: a derivative that pays a fixed amount, usually $1, if a stated event happens and nothing if it doesn't, priced between one cent and 99 cents (Event Contracts & Prediction Markets).
Exercise by exception (Ex-by-Ex): OCC Rule 805's automatic exercise of expiring equity options in the money by a specified amount unless instructed otherwise; brokers publish $0.01 (Options).
Futures commission merchant (FCM): a firm registered with the CFTC and a member of NFA that takes customers' futures orders and money and must segregate customer funds (Futures & FCMs).
Hard to borrow: a security whose shares are scarce in the lending market, needing an approved locate before a short sale and carrying a borrow fee (Margin & Short Selling).
House requirement: a firm's own margin requirement above the Reg T and FINRA minimums, set by security and changeable without notice (Margin & Short Selling).
IML (intraday margin level): under FINRA Rule 4210, the cash a margin account could withdraw while still meeting maintenance margin, negative when it is below (Margin & Short Selling).
Initial margin (futures): the collateral a new futures position requires, set by the clearing house and often raised by the FCM (Futures & FCMs).
Initial margin (securities): the equity required to open a position: 50% of market value for a margin equity security and 150% for a short sale under Regulation T (Margin & Short Selling).
Intermarket sweep order (ISO): a limit order marked as one of a set sent at once to take the full displayed size of every better protected quotation, letting the receiving venue execute without checking for trade-throughs (US Equity Market Structure).
Intraday margin deficit: for a day with an IML-reducing transaction, at least the largest negative IML that day; satisfied by later net deposits or IML increases, outstanding for 15 business days (Margin & Short Selling).
Introducing broker (futures): a futures firm that takes orders but holds no customer money and clears through an FCM, with $45,000 of capital or an FCM's guarantee (Futures & FCMs).
Kill switch: a pre-built action that stops order flow and cancels resting orders at a scope (session, account, strategy, venue connection or firm) (Pre-Trade Risk, Halts & Volatility).
L1, L2, L3 data: top of book (best bid and offer, last trade), depth aggregated by price level, and every resting order with every event on it (Market Data).
Limit state: under LULD, a stock whose best offer is at the lower band or best bid at the upper; a pause follows if it doesn't exit within 15 seconds (Pre-Trade Risk, Halts & Volatility).
Limit Up-Limit Down (LULD): the NMS plan that keeps each stock's trades within percentage bands around a five-minute average price and pauses it for five minutes when it can't (Pre-Trade Risk, Halts & Volatility).
Locate: under Regulation SHO Rule 203(b), the documented borrow, arrangement or reasonable grounds a broker must have before accepting a short sale order (Margin & Short Selling).
Maintenance margin (futures): the equity floor below which a futures account is called (Futures & FCMs).
Maintenance margin (securities): the equity a margin account must keep: at least 25% of long market value under FINRA Rule 4210, more for shorts and under house rules (Margin & Short Selling).
Margin call: a demand for deposit when an account breaks a Reg T, maintenance or house requirement; the firm may sell instead of waiting (Margin & Short Selling).
Margin level: a crypto venue's ratio of equity to used margin (Kraken) or collateral to liabilities (Binance), with call and liquidation thresholds (Margin & Short Selling).
Market access rule (Rule 15c3-5): the SEC rule requiring brokers with market access to keep pre-trade credit, capital, erroneous-order and regulatory controls under their direct and exclusive control (Pre-Trade Risk, Halts & Volatility).
Market-wide circuit breaker: a halt of all US equity trading after the S&P 500 falls 7% or 13% (15 minutes, before 3:25 p.m.) or 20% (the rest of the day) from the prior close (Pre-Trade Risk, Halts & Volatility).
Marketable limit order: a buy limit at or above the national best offer (or a sell at or below the national best bid) when received, which can trade at once and is treated like a market order in routing and reporting (Orders & Order Types).
Mention market: an event contract on whether a speaker says a given word, which the CFTC's staff warned presents a heightened risk of manipulation (Event Contracts & Prediction Markets).
Minimum pricing increment (tick size): the smallest price step for quotes and orders under Rule 612: $0.01 for stocks at $1.00 or more, and $0.005 for stocks with a time-weighted average quoted spread of $0.015 or less once the 2024 amendments take effect (US Equity Market Structure).
National best bid and offer (NBBO): the best bid and best offer for an NMS stock across all exchanges and FINRA, calculated and disseminated under an NMS plan, ties ranked by size then time (US Equity Market Structure).
NFA: the National Futures Association, the futures industry's self-regulatory organization, of which every registered FCM is a member (Futures & FCMs).
Non-display use: market data consumed by machines (routing, risk, matching, derived calculations) rather than shown to people, licensed by category (Market Data).
Not held order: an order where the customer gives the broker discretion over price and time; Rule 606's quarterly statistics exclude them, and brokers often treat fractional and dollar-based orders this way (Orders & Order Types).
Options Disclosure Document (ODD): "Characteristics and Risks of Standardized Options," which Rule 9b-1 requires a broker to deliver before approving an account for options or accepting an order (Options).
Order management system (OMS): the system that accepts orders, checks them against the account, sends them to venues, applies fills and cancels, and keeps each order's state and history (Orders & Order Types).
Order protection rule (Rule 611): the requirement that trading centers prevent trade-throughs of protected quotations, with listed exceptions; its rescission was proposed in June 2026 (US Equity Market Structure).
Overnight ATS: an alternative trading system that matches NMS stocks between 8:00 pm and 4:00 am ET, such as Blue Ocean, Bruce, IBKR Eos and MOON (Extended Hours & 24-Hour Trading).
Overnight LULD bands: static price bands for the overnight session, 20% around the official close and the 7:45 pm last round-lot sale, with minimum widths of $1.00 or $3.00 and no automatic pause (Extended Hours & 24-Hour Trading).
Part 40.11: the CFTC rule barring event contracts that involve terrorism, assassination, war, gaming or unlawful activity, with a 90-day review (Event Contracts & Prediction Markets).
Pattern day trader: the former FINRA designation for four or more day trades in five business days, with a $25,000 minimum; replaced by the intraday margin standard from June 4, 2026 (Margin & Short Selling).
Portfolio margin: a risk-based margin method under FINRA Rule 4210(g) that sets the requirement from the worst loss across price scenarios (Margin & Short Selling).
Position closing only: a firm's restriction that lets customers sell or close positions in a security but not open or add to them, as brokers imposed in January 2021 (Pre-Trade Risk, Halts & Volatility).
Pre-market session: exchange and ATS trading from 4:00 am to 9:30 am ET (Extended Hours & 24-Hour Trading).
Prediction market: a market in event contracts, in the US a CFTC-registered DCM and DCO reached through an FCM (Event Contracts & Prediction Markets).
Price collar: a pre-trade check rejecting a limit price too far through the current market, the control that catches a mistyped price (Pre-Trade Risk, Halts & Volatility).
Price improvement: the amount by which a fill beats the NBBO at receipt (below the offer for a buy, above the bid for a sell), per share and in total; a worse price is disimprovement (Order Routing, PFOF & Best Execution).
Price-time priority: the matching rule in which the best price trades first and, at one price, the earliest order; trades happen at the resting order's price (Order Books & Matching Engines).
Pro-rata allocation: a matching rule that splits fills at a price level in proportion to resting size rather than by arrival time, used in some futures and options markets (Order Books & Matching Engines).
Professional subscriber: a market data user whose use is by or for an entity or serves third parties for compensation, licensed at professional rates; anyone else is non-professional (Market Data).
Protected quotation: an exchange's or FINRA's best bid or offer, displayed by an automated trading center as a round lot and disseminated under an NMS plan, which other venues may not trade through (US Equity Market Structure).
Realized spread: the effective spread measured against the midpoint some time after execution (15 seconds to 5 minutes in Rule 605), showing how much the filler kept once prices moved (Order Routing, PFOF & Best Execution).
Regular and rigorous review: the at-least-quarterly review, by security and order type, of execution quality against competing markets that FINRA 5310 requires of firms that don't review order by order (Order Routing, PFOF & Best Execution).
Regulation SHO: the SEC's short sale rules: order marking, the locate, the close-out of fails, threshold securities and the Rule 201 price test (Margin & Short Selling).
Regulation T: the Federal Reserve's rule (12 CFR 220) on broker credit: initial margin, cash account payment and calls within one payment period (Margin & Short Selling).
Residual interest: an FCM's own money in a customer segregated account, which must cover undermargined customers by 6:00 pm ET on the settlement date (Futures & FCMs).
Round lot: the order size whose quotes count for the NBBO and protection, set by a stock's average closing price: 100 shares at $250 or less, 40 to $1,000, 10 to $10,000 and 1 above (US Equity Market Structure).
Rule 201 (short sale price test): after a 10% decline from the prior close, short sales may not be priced at or below the national best bid for the rest of the day and the next (Pre-Trade Risk, Halts & Volatility).
Rule 2265 disclosure: FINRA's required extended-hours risk disclosure naming lower liquidity, higher volatility, changing prices, unlinked markets, news announcements and wider spreads (Extended Hours & 24-Hour Trading).
Rule 605 report: a monthly public report of execution quality statistics by order type and size by market centers and larger brokers, amended in 2024 with compliance from August 1, 2026 (Order Routing, PFOF & Best Execution).
Rule 606 report: a broker's quarterly public report of where its non-directed orders went, by month and order type, with payments received and the material terms of each venue relationship (Order Routing, PFOF & Best Execution).
Securities information processor (SIP): the processor under an equity data plan that consolidates exchanges' quotes and trades and publishes the NBBO and the consolidated tape (US Equity Market Structure).
Segregation computation: the FCM's daily statement, by currency, of customer funds held, the amount required and its residual interest, filed by noon the next business day (Futures & FCMs).
Self-certification: listing a new contract by filing it and certifying it complies with the Act by the open of business the business day before listing (17 CFR 40.2) (Event Contracts & Prediction Markets).
Self-trade prevention: matching engine rules that stop an account's order from trading with its own resting order, by canceling or decrementing one or both under the mode chosen (Order Books & Matching Engines).
Sequencer (matching engine): the component that assigns every input to a matching engine its place in one order and makes the log durable, so the book is a deterministic function of the log (Order Books & Matching Engines).
Series (option): one option type, strike and expiration on one underlying, within the class of all options on it (Options).
Smart order router: software that splits and sends an order across venues by price, fees, fill probability and order protection, recording each decision for best execution review (Order Routing, PFOF & Best Execution).
Snapshot and replay: recovering a matching engine by restoring its state at a sequence number and reapplying every later input; snapshot frequency sets recovery time (Order Books & Matching Engines).
Source agency: the named source an event contract's rules use to determine the outcome (Event Contracts & Prediction Markets).
Stop and stop limit orders: orders dormant until the market reaches a stop price, then sent as a market order or a limit order; what "reaches" means (a trade or a quote) is each platform's rule (Orders & Order Types).
Threshold security: a security with fails of 10,000 shares or more and 0.5% of shares outstanding for five settlement days, on an SRO list; fails in it must be closed out after 13 days (Margin & Short Selling).
Time in force: how long an order stays live: day, good till canceled, good till date, immediate or cancel, fill or kill, or for the opening or closing auction only (Orders & Order Types).
Trade date roll: the 8:00 pm ET boundary after which an execution belongs to the next trade date for CAT, trade reporting and settlement, from December 6, 2026 (Extended Hours & 24-Hour Trading).
Trading pause: the five-minute LULD halt in a single stock after a limit state lasts 15 seconds, ended by a reopening auction (Pre-Trade Risk, Halts & Volatility).
Trailing stop: a stop whose price follows the market by a fixed amount or percentage from its best level since entry, which the platform must persist (Orders & Order Types).
Variation margin: the day's gain or loss on a futures position, paid in cash from the losers to the winners through the clearing house at each daily settlement (Futures & FCMs).
Vertical spread: a long and a short option of the same type and expiration at different strikes; its requirement equals its maximum loss (Options).
Wholesaler: a broker-dealer that fills retail orders as principal off-exchange, usually at or inside the NBBO, and pays brokers for the flow (US Equity Market Structure).

0DTE (zero days to expiration): an option bought or sold on its expiration day; a majority of US index option volume by 2026 (Options).
23/5 trading: exchange trading of NMS stocks 23 hours a day, five days a week, with an overnight session from 8:00 pm to 4:00 am ET and a one-hour pause from 8:00 to 9:00 pm Monday to Thursday, planned from December 6, 2026 (Extended Hours & 24-Hour Trading).
30.7 secured amount: the separate pool an FCM holds for customers trading on foreign futures exchanges (Futures & FCMs).
Access fee cap: the most an exchange may charge to execute against its protected quotations under Rule 610(c): $0.003 a share today, $0.001 a share (0.1% of the quote below $1.00) once the 2024 amendments take effect in November 2027 (US Equity Market Structure).
After-hours session: exchange and ATS trading from 4:00 pm to 8:00 pm ET, limit orders only on most venues (Extended Hours & 24-Hour Trading).
Alternative trading system (ATS): a trading system operated by a broker-dealer under Regulation ATS rather than registered as an exchange; an NMS Stock ATS needs an effective Form ATS-N (US Equity Market Structure).
American-style option: an option that can be exercised on any business day up to expiration, so a short position can be assigned early (Options).
Assignment: OCC's notice that an exercise has been matched to a short position, allocated by the clearing firm to a customer first in first out or at random (Options).
Best execution: a broker's duty under FINRA Rule 5310 to use reasonable diligence to find the best market for a customer's order so the price is as favorable as possible under prevailing conditions (Order Routing, PFOF & Best Execution).
Best odd-lot order: the highest-priced odd-lot bid above the national best bid, or lowest-priced odd-lot offer below the national best offer, added to odd-lot information by the 2024 amendments (US Equity Market Structure).
Book checksum: a hash of a venue's top book levels sent with its feed (Kraken's CRC32 of the top 10 levels) so a client can prove its rebuilt book matches the venue's (Market Data).
Borrow fee: the annualized rate a short seller pays to borrow shares, charged daily on the short's value (Alpaca and Robinhood divide by 360) (Margin & Short Selling).
Cancel/replace race: a cancel or replace request that crosses a fill in flight, so the venue applies it to a partly or fully filled order; FIX replaces state the total quantity to avoid doubling a position (Orders & Order Types).
Candle: the open, high, low, close and volume of trades in an interval, identified by its open time and recomputable when late, busted or corrected trades change it (Market Data).
ClOrdID chain: the FIX client order IDs linking an order to its replacements; each replace carries a new ClOrdID and OrigClOrdID naming the previous non-rejected order (Orders & Order Types).
Closing auction: the single-price auction that sets a listed stock's official close, with entry and cancel cutoffs (3:50 p.m. ET at NYSE) and imbalance messages before it (US Equity Market Structure).
Collar (market order): a broker's conversion of a market order into a limit order some distance from the quote so it can't fill through a thin book; a material term the customer must be told (Orders & Order Types).
Conflation: sending each client only the latest state per symbol at the client's rate rather than every update, correct for quotes and charts, wrong for consumers that need every event (Market Data).
Contrary Exercise Advice: the form a member submits by 7:30 p.m. ET on expiration day to exercise or not exercise a customer's expiring option against the exercise-by-exception default (Options).
Covered call: a short call against 100 shares held per contract; income now, upside capped at the strike (Options).
CT Plan: the single consolidated equity data plan, effective November 20, 2024, that on implementation replaces the CTA, CQ and UTP plans (US Equity Market Structure).
Day margin: an FCM's lower margin for a futures position opened and closed within a session, ending at a set time before the close (Futures & FCMs).
Derivatives clearing organization (DCO): a CFTC-registered clearing house that becomes the counterparty to every cleared futures trade, sets margin and settles with clearing members at least once each business day (Futures & FCMs).
Designated contract market (DCM): a CFTC-registered futures exchange, which lists contracts by self-certification or approval (Futures & FCMs).
Direct feed: an exchange's own market data product, with depth or order-by-order detail, that reaches a subscriber without the hop through the SIP (US Equity Market Structure).
Early assignment: assignment of an American-style short option before expiration, most often on a call the day before an ex-dividend date when the dividend exceeds its time value (Options).
Effective spread: twice the distance between a fill price and the NBBO midpoint at order receipt; divided by the quoted spread it gives E/Q, the share of the spread the customer paid (Order Routing, PFOF & Best Execution).
Event contract: a derivative that pays a fixed amount, usually $1, if a stated event happens and nothing if it doesn't, priced between one cent and 99 cents (Event Contracts & Prediction Markets).
Exercise by exception (Ex-by-Ex): OCC Rule 805's automatic exercise of expiring equity options in the money by a specified amount unless instructed otherwise; brokers publish $0.01 (Options).
Futures commission merchant (FCM): a firm registered with the CFTC and a member of NFA that takes customers' futures orders and money and must segregate customer funds (Futures & FCMs).
Hard to borrow: a security whose shares are scarce in the lending market, needing an approved locate before a short sale and carrying a borrow fee (Margin & Short Selling).
House requirement: a firm's own margin requirement above the Reg T and FINRA minimums, set by security and changeable without notice (Margin & Short Selling).
IML (intraday margin level): under FINRA Rule 4210, the cash a margin account could withdraw while still meeting maintenance margin, negative when it is below (Margin & Short Selling).
Initial margin (futures): the collateral a new futures position requires, set by the clearing house and often raised by the FCM (Futures & FCMs).
Initial margin (securities): the equity required to open a position: 50% of market value for a margin equity security and 150% for a short sale under Regulation T (Margin & Short Selling).
Intermarket sweep order (ISO): a limit order marked as one of a set sent at once to take the full displayed size of every better protected quotation, letting the receiving venue execute without checking for trade-throughs (US Equity Market Structure).
Intraday margin deficit: for a day with an IML-reducing transaction, at least the largest negative IML that day; satisfied by later net deposits or IML increases, outstanding for 15 business days (Margin & Short Selling).
Introducing broker (futures): a futures firm that takes orders but holds no customer money and clears through an FCM, with $45,000 of capital or an FCM's guarantee (Futures & FCMs).
Kill switch: a pre-built action that stops order flow and cancels resting orders at a scope (session, account, strategy, venue connection or firm) (Pre-Trade Risk, Halts & Volatility).
L1, L2, L3 data: top of book (best bid and offer, last trade), depth aggregated by price level, and every resting order with every event on it (Market Data).
Limit state: under LULD, a stock whose best offer is at the lower band or best bid at the upper; a pause follows if it doesn't exit within 15 seconds (Pre-Trade Risk, Halts & Volatility).
Limit Up-Limit Down (LULD): the NMS plan that keeps each stock's trades within percentage bands around a five-minute average price and pauses it for five minutes when it can't (Pre-Trade Risk, Halts & Volatility).
Locate: under Regulation SHO Rule 203(b), the documented borrow, arrangement or reasonable grounds a broker must have before accepting a short sale order (Margin & Short Selling).
Maintenance margin (futures): the equity floor below which a futures account is called (Futures & FCMs).
Maintenance margin (securities): the equity a margin account must keep: at least 25% of long market value under FINRA Rule 4210, more for shorts and under house rules (Margin & Short Selling).
Margin call: a demand for deposit when an account breaks a Reg T, maintenance or house requirement; the firm may sell instead of waiting (Margin & Short Selling).
Margin level: a crypto venue's ratio of equity to used margin (Kraken) or collateral to liabilities (Binance), with call and liquidation thresholds (Margin & Short Selling).
Market access rule (Rule 15c3-5): the SEC rule requiring brokers with market access to keep pre-trade credit, capital, erroneous-order and regulatory controls under their direct and exclusive control (Pre-Trade Risk, Halts & Volatility).
Market-wide circuit breaker: a halt of all US equity trading after the S&P 500 falls 7% or 13% (15 minutes, before 3:25 p.m.) or 20% (the rest of the day) from the prior close (Pre-Trade Risk, Halts & Volatility).
Marketable limit order: a buy limit at or above the national best offer (or a sell at or below the national best bid) when received, which can trade at once and is treated like a market order in routing and reporting (Orders & Order Types).
Mention market: an event contract on whether a speaker says a given word, which the CFTC's staff warned presents a heightened risk of manipulation (Event Contracts & Prediction Markets).
Minimum pricing increment (tick size): the smallest price step for quotes and orders under Rule 612: $0.01 for stocks at $1.00 or more, and $0.005 for stocks with a time-weighted average quoted spread of $0.015 or less once the 2024 amendments take effect (US Equity Market Structure).
National best bid and offer (NBBO): the best bid and best offer for an NMS stock across all exchanges and FINRA, calculated and disseminated under an NMS plan, ties ranked by size then time (US Equity Market Structure).
NFA: the National Futures Association, the futures industry's self-regulatory organization, of which every registered FCM is a member (Futures & FCMs).
Non-display use: market data consumed by machines (routing, risk, matching, derived calculations) rather than shown to people, licensed by category (Market Data).
Not held order: an order where the customer gives the broker discretion over price and time; Rule 606's quarterly statistics exclude them, and brokers often treat fractional and dollar-based orders this way (Orders & Order Types).
Options Disclosure Document (ODD): "Characteristics and Risks of Standardized Options," which Rule 9b-1 requires a broker to deliver before approving an account for options or accepting an order (Options).
Order management system (OMS): the system that accepts orders, checks them against the account, sends them to venues, applies fills and cancels, and keeps each order's state and history (Orders & Order Types).
Order protection rule (Rule 611): the requirement that trading centers prevent trade-throughs of protected quotations, with listed exceptions; its rescission was proposed in June 2026 (US Equity Market Structure).
Overnight ATS: an alternative trading system that matches NMS stocks between 8:00 pm and 4:00 am ET, such as Blue Ocean, Bruce, IBKR Eos and MOON (Extended Hours & 24-Hour Trading).
Overnight LULD bands: static price bands for the overnight session, 20% around the official close and the 7:45 pm last round-lot sale, with minimum widths of $1.00 or $3.00 and no automatic pause (Extended Hours & 24-Hour Trading).
Part 40.11: the CFTC rule barring event contracts that involve terrorism, assassination, war, gaming or unlawful activity, with a 90-day review (Event Contracts & Prediction Markets).
Pattern day trader: the former FINRA designation for four or more day trades in five business days, with a $25,000 minimum; replaced by the intraday margin standard from June 4, 2026 (Margin & Short Selling).
Portfolio margin: a risk-based margin method under FINRA Rule 4210(g) that sets the requirement from the worst loss across price scenarios (Margin & Short Selling).
Position closing only: a firm's restriction that lets customers sell or close positions in a security but not open or add to them, as brokers imposed in January 2021 (Pre-Trade Risk, Halts & Volatility).
Pre-market session: exchange and ATS trading from 4:00 am to 9:30 am ET (Extended Hours & 24-Hour Trading).
Prediction market: a market in event contracts, in the US a CFTC-registered DCM and DCO reached through an FCM (Event Contracts & Prediction Markets).
Price collar: a pre-trade check rejecting a limit price too far through the current market, the control that catches a mistyped price (Pre-Trade Risk, Halts & Volatility).
Price improvement: the amount by which a fill beats the NBBO at receipt (below the offer for a buy, above the bid for a sell), per share and in total; a worse price is disimprovement (Order Routing, PFOF & Best Execution).
Price-time priority: the matching rule in which the best price trades first and, at one price, the earliest order; trades happen at the resting order's price (Order Books & Matching Engines).
Pro-rata allocation: a matching rule that splits fills at a price level in proportion to resting size rather than by arrival time, used in some futures and options markets (Order Books & Matching Engines).
Professional subscriber: a market data user whose use is by or for an entity or serves third parties for compensation, licensed at professional rates; anyone else is non-professional (Market Data).
Protected quotation: an exchange's or FINRA's best bid or offer, displayed by an automated trading center as a round lot and disseminated under an NMS plan, which other venues may not trade through (US Equity Market Structure).
Realized spread: the effective spread measured against the midpoint some time after execution (15 seconds to 5 minutes in Rule 605), showing how much the filler kept once prices moved (Order Routing, PFOF & Best Execution).
Regular and rigorous review: the at-least-quarterly review, by security and order type, of execution quality against competing markets that FINRA 5310 requires of firms that don't review order by order (Order Routing, PFOF & Best Execution).
Regulation SHO: the SEC's short sale rules: order marking, the locate, the close-out of fails, threshold securities and the Rule 201 price test (Margin & Short Selling).
Regulation T: the Federal Reserve's rule (12 CFR 220) on broker credit: initial margin, cash account payment and calls within one payment period (Margin & Short Selling).
Residual interest: an FCM's own money in a customer segregated account, which must cover undermargined customers by 6:00 pm ET on the settlement date (Futures & FCMs).
Round lot: the order size whose quotes count for the NBBO and protection, set by a stock's average closing price: 100 shares at $250 or less, 40 to $1,000, 10 to $10,000 and 1 above (US Equity Market Structure).
Rule 201 (short sale price test): after a 10% decline from the prior close, short sales may not be priced at or below the national best bid for the rest of the day and the next (Pre-Trade Risk, Halts & Volatility).
Rule 2265 disclosure: FINRA's required extended-hours risk disclosure naming lower liquidity, higher volatility, changing prices, unlinked markets, news announcements and wider spreads (Extended Hours & 24-Hour Trading).
Rule 605 report: a monthly public report of execution quality statistics by order type and size by market centers and larger brokers, amended in 2024 with compliance from August 1, 2026 (Order Routing, PFOF & Best Execution).
Rule 606 report: a broker's quarterly public report of where its non-directed orders went, by month and order type, with payments received and the material terms of each venue relationship (Order Routing, PFOF & Best Execution).
Securities information processor (SIP): the processor under an equity data plan that consolidates exchanges' quotes and trades and publishes the NBBO and the consolidated tape (US Equity Market Structure).
Segregation computation: the FCM's daily statement, by currency, of customer funds held, the amount required and its residual interest, filed by noon the next business day (Futures & FCMs).
Self-certification: listing a new contract by filing it and certifying it complies with the Act by the open of business the business day before listing (17 CFR 40.2) (Event Contracts & Prediction Markets).
Self-trade prevention: matching engine rules that stop an account's order from trading with its own resting order, by canceling or decrementing one or both under the mode chosen (Order Books & Matching Engines).
Sequencer (matching engine): the component that assigns every input to a matching engine its place in one order and makes the log durable, so the book is a deterministic function of the log (Order Books & Matching Engines).
Series (option): one option type, strike and expiration on one underlying, within the class of all options on it (Options).
Smart order router: software that splits and sends an order across venues by price, fees, fill probability and order protection, recording each decision for best execution review (Order Routing, PFOF & Best Execution).
Snapshot and replay: recovering a matching engine by restoring its state at a sequence number and reapplying every later input; snapshot frequency sets recovery time (Order Books & Matching Engines).
Source agency: the named source an event contract's rules use to determine the outcome (Event Contracts & Prediction Markets).
Stop and stop limit orders: orders dormant until the market reaches a stop price, then sent as a market order or a limit order; what "reaches" means (a trade or a quote) is each platform's rule (Orders & Order Types).
Threshold security: a security with fails of 10,000 shares or more and 0.5% of shares outstanding for five settlement days, on an SRO list; fails in it must be closed out after 13 days (Margin & Short Selling).
Time in force: how long an order stays live: day, good till canceled, good till date, immediate or cancel, fill or kill, or for the opening or closing auction only (Orders & Order Types).
Trade date roll: the 8:00 pm ET boundary after which an execution belongs to the next trade date for CAT, trade reporting and settlement, from December 6, 2026 (Extended Hours & 24-Hour Trading).
Trading pause: the five-minute LULD halt in a single stock after a limit state lasts 15 seconds, ended by a reopening auction (Pre-Trade Risk, Halts & Volatility).
Trailing stop: a stop whose price follows the market by a fixed amount or percentage from its best level since entry, which the platform must persist (Orders & Order Types).
Variation margin: the day's gain or loss on a futures position, paid in cash from the losers to the winners through the clearing house at each daily settlement (Futures & FCMs).
Vertical spread: a long and a short option of the same type and expiration at different strikes; its requirement equals its maximum loss (Options).
Wholesaler: a broker-dealer that fills retail orders as principal off-exchange, usually at or inside the NBBO, and pays brokers for the flow (US Equity Market Structure).