Educational purposes only. This content does not constitute investment advice. Read our disclaimer
StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
When your order fills at a slightly better price than the quote you were shown.
Why It Matters
Your fill isn't always at the exact quoted price - sometimes it's a hair better. If the quoted ask is $20.01 but a market maker fills your buy at $20.005, you got half a cent of price improvement. It happens because firms compete for order flow, and the NBBO is a ceiling on how bad your price can be, not a limit on how good. On a single share it's trivial; across thousands of trades it adds up, which is why brokers publish their average price-improvement statistics.
Key Points
- A fill slightly better than the quoted price
- Comes from firms competing to handle your order
- Tiny per trade, but it accumulates over many trades
Learn More
Market Orders Explained
Get a complete explanation with examples, key takeaways, and a quiz to test your knowledge.
Related Terms
Common Questions
When your order fills at a slightly better price than the quote you were shown. Your fill isn't always at the exact quoted price - sometimes it's a hair better. If the quoted ask is $20.
Your fill isn't always at the exact quoted price - sometimes it's a hair better. If the quoted ask is $20.01 but a market maker fills your buy at $20.005, you got half a cent of price improvement. It happens because firms compete for order flow, and the NBBO is a ceiling on how bad your price can be, not a limit on how good. On a single share it's trivial; across thousands of trades it adds up, which is why brokers publish their average price-improvement statistics.
A fill slightly better than the quoted price
Comes from firms competing to handle your order
Tiny per trade, but it accumulates over many trades