Choice Market

The term "Choice Market" is synonymous with a Locked Market. It's the rare occurrence when a market has equal bid and ask prices with zero spread.

The SEC banned a choice market scenario for stocks in 2007 with the Regulation National Market System, as it is considered to contravene an orderly market, and would put the public at risk. A choice market scenario will sometimes occur mathematically in the Forex markets, where bps, or basis points, are the unit of quotation, and can equate to fractions of a penny’s differential between a listed bid and ask, with extra decimal places needed to see the differential.

We see choice markets all the time, where both parties immediately agree to the price of exchange on an item. It’s called a donation, and the price is technically zero, as far as bookkeeping is concerned.