The term fast market is used to describe a condition whereby the rapid trading of a security results in a delay in the transmission of data concerning sales and price quotes. While a fast market can affect common stocks, the term is more often associated with the trading of options.
When securities are traded in a rapid manner, the volume of information exchanged can result in a delay in the updating of electronically available information being passed to traders. This is referred to as a fast market condition. While this can happen with any security, options are particularly susceptible to this problem. A fast market will be accompanied by volatile prices and relatively high trading volumes.
The exchange will formally declare a fast market condition, and once declared, brokers are not held to the same standards as those that apply during normal market conditions. For example, during a fast market price quotes will be delayed and a broker may not be able to execute an order in a timely fashion resulting in sales at less than desirable price points.