Trading & MarketsQuestion 105 of 125
A trade executed at a price between the current bid and ask is said to occur:
a.Inside the spread (price improvement for the customer)
b.Outside the market
c.At the prior close
d.Only on a dark pool
Explanation
An execution between the prevailing bid and ask occurs inside the spread and represents price improvement compared with paying the full ask or receiving only the bid. Achieving price improvement is one way firms meet their best execution responsibilities to customers.
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