National Best Bid and Offer (NBBO)
The best available bid and ask price for a security across all registered U.S. exchanges.
What is NBBO?
The National Best Bid and Offer (NBBO) is the highest available bid price and lowest available offer (ask) price for a security at any given moment, aggregated across all registered national securities exchanges and certain off-exchange venues in the United States. Under Regulation NMS (National Market System), broker-dealers are required to execute customer orders at prices at least as favorable as the NBBO — a requirement known as the Order Protection Rule or trade-through prohibition. The NBBO is disseminated in real time through the Securities Information Processor (SIP) and serves as the primary benchmark for evaluating best execution and assessing price improvement received by investors.
Example
If the NYSE shows a best bid of $99.98 and Nasdaq shows a best ask of $100.01 for Apple stock, the NBBO is $99.98 × $100.01 with a spread of $0.03. A broker routing a market buy order must execute at $100.01 or better — it cannot legally route to an exchange quoting $100.05 as that would violate the Reg NMS trade-through prohibition and harm the customer.