I and (especially) whoever it was who placed the order that I didn't get were scammed wouldn't you say? I didn't get filled, and the person who placed the order paid way more than I was willing to sell it for.
That person used a legitimate technique - he intentionally swept the book on paying a lot for his buy order and disregarding better prices on other market centers. I bet that person was a SmartRouter for one of big houses. Those SR usually shoot IOK, ISO, and Do-Not-Ship orders because they see the top of the book from all 11 market centers and thus satisfy RegNMS. Again, Where is the scam?
Are you serious? Think real hard, I'm sure you can figure it out. Or better yet, compare what Reg NMS claims its purpose is and what it really does. Then check who stood behind Reg NMS and pushed it.
I don't care who stood behind RegNMS or pushed it. What I do care is the benefit I can get from it - MD dissemination requirements and protected quotes an the top of book. Yes, in some cases I may pay routing fees, but it's petter than sweep the book several cents down, especially in small-cap stocks. If you know any conspiracy behind RegNMS, post it out, I'll be very glad to read it...
One possible scenario - SR probably already took all liquidity on all the top of books and decided to route out the rest to AMEX (say commissions/rebate fees were the best on AMEX in that particular case). If SR would really "smart", it should consider book depth on all exchanges and fill the order. But not SmartRouters are so smart, and it requires to have book depth subscription, which cost some bucks. Another scenarios may be a bug in SR, or simply a fat finger...
Ok, it's pretty obvious you have little knowledge and experience of intraday market mechanics. Control over order flow is the BEST way to make money in the market. It's risk-free. Where do you think the MM was when that market order was sweeping through his book and ONLY his book.
Market centers make money on market data and on order execution flow. With RegNMS, they have to compete with each other to publish better price in order to attract buyers/sellers and get the flow. BTW, who controls the order flow?
I can tell you never really traded NYSE. Reg NMS basically took the NYSE edge and split it up among the main big name firms. Whoever gets the market order with the best NBBO, get to take the rest of it and sweep their own book, ignoring better pricing on other routes. It's an easy arbitrage opportunity, just like the specialists used to do when they would lock up market orders, "price improve" & "provide liquidity" through insane spreads. Seriously, think about the rule and ask yourself if it makes sense. How in the world is benefitting anyone but the big name firms who handle this order flow. If I send a market order, I don't want it to be limited to only one route. In fact, why should I even worry about where I send it to, I would prefer one single pipeline where everyone's orders are matched. This is what Reg NMS pretends to be, but in fact, it's nothing more than another gimmick meant to line the pockets of Wall Street.
i agree, nobody in the right mind would send that order. Just an example to illustrate the process. As for the rule, I think it has it's good points and bad points. Taking focus away from the primary by making all mkt centers compete is a good thing for the individual investor/trader. Letting a mkt center clear its own book at your expense and consequently removing transparency isn't. Anybody who understands the rule shouldn't be negatively impacted by it. It just leaves even more room for the market makers and exchanges to take advantage of novice traders.