Trading Over The Counter And NASDAQ Securities - NASDAQ Order Protection Feature

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

 

Introduction


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