abstract:National Best Bid and Offer (NBBO) is a term used in United States Securities and Exchange Commission regulations. Brokers are required to execute customer trades at the best available ask price when buying securities, and the best available bid price when selling securities.
ISE's system will match orders at the midpoint of the NationalBestBidandOffer, which is the current quote system traders use to price buy and sell orders.
When the NYSE gets deluged, Hunsader says, their quote feed to the Consolidated Quote System (CQS), which is used as part of the NationalBestBidandOffer (NBBO) system, gets delayed.
When the exchange is not on the nationalbestbidandoffer (NBBO), the mechanism here at the CBOE will flash that order to participants in the marketplace and allow those participants to step up to the NBBO.