At present, the restructured electricity market has been a prominent research area and attracted attention. The motivation of the restructuring in the power system is to introduce the competition at various levels and to generate a correct economic signal to reduce the generation cost. As a result, it is required to have an effective price scheme to deliver useful information about the power. The pricing mechanism is dependent on the demand at the load level, the generator bids, and the limits of the transmission network. To address the congestion charges, Locational Marginal Pricing (LMP) is utilized in restructured electricity markets. To improve the system efficiency, in this paper, a Hybrid Backtracking Search Optimization Algorithm with Grey Wolf Optimization (GWO-HBOA) is proposed, based on the Security Constrained Economic Dispatch (SCED). The objective of the proposed scheme is to minimize fuel cost in the transmission system under the loss and lossless conditions, considering both the normal and congestion conditions. BOA is conducted first, and Grasshopper Optimization Algorithm (GOA) is subsequently combined with the BOA, which results in the GWO-HBOA. To predict the demand for generator power, the demand response is estimated exactly. Moreover, the load LMP can be segregated at service security levels with respect to various load entities. In this way, the overcharging and underpayment issues can be solved under the security constrained market optimization. Furthermore, to determine the LMP loss, DC optimal power flow is analyzed. The proposed GWO with constrained security is estimated on IEEE 30-bus test system. Compared with the existing techniques, the proposed algorithm achieves better performance, in terms of fuel cost, voltage stability, voltage deviations, real power loss, and reactive power loss.