Business and Personal Finance Dictionary

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• CROSSED MARKET
  
  A market in a particular stock or option is described as crossed when a bid to buy that stock or option is higher than the offer to sell it, or when an offer to sell is lower than a corresponding bid to buy. A crossed market reverses the normal relationship of a stock quotation in which the bid price is always lower than the ask price. Although it is illegal for market makers to cross a market deliberately, the situation may occur when individual investors place after-hours market orders over the Internet for execution at opening, or when investors participate directly in the market through an electronic communications network (ECN). The National Association of Securities Dealers (NASD) has introduced a set of pre-opening procedures for market makers on the Nasdaq Stock Market to help prevent the confusion, and potential inequalities in pricing, that a crossed market can produce.
  
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