Order protection rule

Order protection rule

A provision of the National Market System that forces trading centers to quote equivalent and consistent execution prices for a security on all exchanges that allow trading of that security. Also known as Rule 611 after its designation in the Federal Register, the Order Protection Rule is designed to prevent trade-throughs, or trades executed at prices other than the best-quoted price for that security. Rule 611 applies to all stocks on major indices and most over-the-counter stocks.

Order Protection Rule

A rule requiring investors to receive a price for a security that is at least equivalent to the price for the same security on another exchange. That is, the order protection rule forbids an order from being executed at a price below the price on another exchange. There are various exceptions; notably limit orders and IOC orders do not necessarily abide by the order protection rule. The rule is a provision of Regulation NMS and is designed to help integrate American exchanges and to protect investors from bad deals. It is also called Rule 611.

Order protection rule.

The order protection rule, part of Regulation NMS -- for National Market System -- adopted by the Securities and Exchange Commission (SEC) in 2005, requires that every stock trading center establish and enforce a policy that ensures no transaction will be traded-through, or executed at a price that's lower than a protected quotation in that security displayed by another trading center.

A protected quotation is one that's immediately and automatically accessible. The order protection rule, also called Rule 611, does allow certain exceptions, which apply to limit orders, immediate-or-cancel (IOC) orders, and intermarket sweep orders (ISOs).

References in classic literature ?
Margaret, the eldest of the four, was sixteen, and very pretty, being plump and fair, with large eyes, plenty of soft brown hair, a sweet mouth, and white hands, of which she was rather vain.
A plump, fair-skinned girl was standing in the doorway.
She did not want a profusion; she craved a nice and tasty bite--a half dozen blue-points, a plump chop with cress, a something sweet--a creme-frappee, for instance; a glass of Rhine wine, and after all a small cup of black coffee.
She was a booming lass of fresh eighteen; plump as a partridge; ripe and melting and rosy-cheeked as one of her father's peaches, and universally famed, not merely for her beauty, but her vast expectations.
It was plump, one afternoon, in the middle of my very hour: the children were tucked away, and I had come out for my stroll.
A well-fed, plump Huzza Porpoise will yield you one good gallon of good oil.
She was a plump, trim, tidy little woman, with smooth, dark hair, dark eyes, and a merry little mouth.
Her whole plump countenance beams with satisfaction and contentment from under her well-starched checked turban, bearing on it, however, if we must confess it, a little of that tinge of self-consciousness which becomes the first cook of the neighborhood, as Aunt Chloe was universally held and acknowledged to be.
The first corner I turned, I came plump upon one of our slaves, snooping around with a watchman.
We shall see, for if he puts her in I shall recognize her by her Black Forest clothes, and her burned complexion, her plump figure, her fat hands, her dull expression, her gentle spirit, her generous feet, her bonnetless head, and the plaited tails of hemp-colored hair hanging down her back.
She had merry eyes, a somewhat too plump figure for her years, and was popularly supposed to have a fascinating way with her.
She was short, plump, and fair, with a fine bloom, blue eyes, light hair, regular features, and a look of great sweetness, and, before the end of the evening, Emma was as much pleased with her manners as her person, and quite determined to continue the acquaintance.