A market in which the bid and ask prices perfectly converge. In other words, a locked market occurs when one market maker’s quoted ask price for a security equals another market maker’s quoted bid price for the same security. In general, it is a situation in which the best bid price is equal to or higher than the best offer price. For stocks, a market is locked when the bid price equals the asked price. For futures, a locked market occurs when trading is halted because prices have reached their exchange-set daily limit move (the market is also said to be “locked-limit”).

Locked market is an infrequent occurrence because market makers make profit from the spread between the bid and ask prices. It falls on market makers, among others, to maintain orderly markets. Particularly, they are responsible for maintaining a quote that does not “lock the market”. Typically, trading in locked markets is prohibited because matching orders can be manipulated to generate fees. Locked markets are more common in a largely order-matching electronic system.

An example of a locked market with respect of Oracle’s stock is: ORCL 11.50 – 11.50.