Friday, September 18, 2009

SEC Proposes Flash Order Ban

A flash order enables a person who has not publicly displayed a quote to see orders less than a second before the public is given an opportunity to trade with those orders. Investors who have access only to information displayed as public quotes may be harmed if market participants are able to flash orders and avoid the need to make the order publicly available. The SEC has proposed proposed a rule amendment that would prohibit the practice of flashing marketable orders.

A flash order gives market insiders a head-start on trading, and non-public pricing information. While the practice is legal, there has been no word on why this has been permitted. More>>>

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