Glossary
What is the best bid and offer (BBO)?
Also called: BBO, top of book, best bid and ask, level 1 quote, NBBO
Updated Ninja Terminal team
Definition
The best bid and offer, or BBO, is the highest price a buyer is currently willing to pay and the lowest price a seller is currently willing to accept in an order book. Together they form the top of the book. The difference between them is the bid-ask spread, and a market order fills first at these prices.
The BBO is the first level of the order book. Everything else in the book is deeper liquidity at worse prices.
What does it tell you?
- Best bid: the highest resting buy order. A market sell fills here first.
- Best ask (offer): the lowest resting sell order. A market buy fills here first.
- Mid price: the average of the two.
- Spread: best ask minus best bid. See bid-ask spread.
Example: best bid 59,995, best ask 60,005. The mid price is 60,000 and the spread is 10 USD.
Why is it different from last price?
The last price is the most recent trade. The BBO shows where you could trade right now. In a fast market the last price can sit outside the current bid and ask for a short time. The mark price is a third value used for margin.
What does the BBO miss?
It shows only the best price and its size. A large order will walk beyond it and fill at worse prices. See slippage. For that you need depth from the full order book.
Where does it appear in Ninja Terminal?
Ninja Terminal streams best bid and offer data next to mark price and 24-hour ticker data for each market. Spread alerts can fire when the gap between bid and ask goes above or below a level you set.
Frequently asked questions
What is the difference between BBO and last price?
BBO is the best resting buy and sell prices right now. Last price is where the most recent trade happened.
Why can a market order fill beyond the BBO?
The BBO shows only the top level. If your order is larger than the size at that level, it continues into worse levels.