What is a locked market?
The locked market is a short -term situation that can appear on the market. This phenomenon occurs when the offer and requests for the security of the security are the same. The market conditions of this nature can be recorded both on the capital market and on the futures market. This set of circumstances effectively eliminates any differences in the range of ASK menu between the two prices. The locked market is most likely to occur in markets that experience a large amount of trade volume, but rarely lasts any considerable amount of time.
There are several different reasons why the bid price and the price of the application can be the same for a short time. The most common event is related to the activity of the buyer and the seller in the transaction. If the transaction initiator offered to payment, but the second part has not yet received the payment, the lock will appear and remain in place until the payment is received. This is especially true in situations in which one party paid brokerage involved in the transaction, but this PLATBA was not credited to the other party's account. After the transfer is completed, the locked situation is resolved and trading can continue as before.
On the futures market, a locked market may occur due to the large volume of business activities that occurred during the current trading day. If prices reach their daily limit, prices are frozen for these securities until the next business day. During this period there is no difference between offering and requesting prices. As soon as the new day begins, any orders placed before officially opening the market are usually sufficient to re -determine the spread and business activities will start to escalate again.
It is important to realize that the locked market does not mean that the market maintains any type of permanent damage. This type of market occurrence also automatically reports no type of negative characteristics of safety involved in the lock or that the buyer or seller has been involved in the actNetta that creates any type of continued disruption in this market. As soon as the circumstances that have created a locked market have been resolved and the offer range-ass will be restored, the market will continue as before. For this reason, investors are not usually concerned about the market and simply focus on another investment activity until the lock is resolved.