To help ensure that orders are not executed at prices that are not reasonably related to the inside market, the NASDAQ System will perform a price check on all orders that are entered through the system. If the price of the order entered exceeds the allowable price deviation, the system will send a warning message to the party entering the order. The price deviation warning message will allow the party who entered the order to override and resend the order if they wish. The price deviation warning will appear on the system as “Rej. Over Allowable Deviation”. The allowable price deviation is based on the price of the security. The allowable deviations are as follows:

Price Deviation

$0-1

.25

$1-5

.375

$5-15

.50

$15-25

.625

$25-100

.75

Greater than

$100

1.00

Need Help Passing Your Series 57 Exam?



Introduction

Related Articles
  1. Managing Wealth

    Standard Deviation

    Learn about how standard deviation is applied to the annual rate of return of an investment to measure the its volatility.
  2. Investing

    Is The Series 24 Exam Hard?

    What makes the series 24 so challenging? The exam focuses very heavily on the supervision of trading and market making and the supervision of investment banking.
  3. Trading

    The Basics Of Trading A Stock

    Taking control of your portfolio means knowing what orders to use when buying or selling stocks.
  4. Investing

    Explaining Market Orders

    A market order is the most common order used to purchase a financial security.
  5. Investing

    Explaining the Empirical Rule

    The empirical rule provides a quick estimate of the spread of data in a normal statistical distribution.
  6. Personal Finance

    A Day In The Life Of A System Trader

    Systems traders divide their time between trading, developing, backtesting, optimizing and forward testing, to create viable and high-probability trading systems.
  7. Trading

    How To Place Orders With A Forex Broker

    Learn how to set each type of stop and limit when trading currencies.
  8. Trading

    Understanding Order Execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  9. Trading

    Which Order To Use? Stop-Loss Or Stop-Limit Orders

    Stop-loss and stop-limit orders can provide different types of protection for investors seeking to lock in profits or limit losses. Investors need to know how each type of order works to know ...
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center