What is a Fast Market?

Answer:
A fast market is a market that experiences

high trading volumes and increased volatility. A severe trade imbalance is created when there are more “sells” than “buys.”

Fast markets experience a wide price fluctuation during a short time period and only occur in a small number of stocks. However, this type of market can have an effect for all investors. A fast market can cause a delay in execution as well as cause market orders to be executed at prices substantially different from the price quote at the time of the order.

In a fast market, the transactions which take place in the “pit” happen very quickly. Price reporters behind with price quotations insert a “fast tape” labeled “FAST” and provide a range of prices, rather than quoting a specific price, to show that the market is moving rapidly.

Protect yourself from the increased risks of a fast market by knowing the available options of trading in such a market.


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