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Order protection rule

Definition:

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.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Price value of a basis point (PVBP)

Also called the dollar value of a basis point; a measure of the change in the price of a bond if the required yield changes by one basis point.

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