Recent content by East-Coast

In general, the mkt mkr/specialist can step in front of the best bid or offer as long as they are improving by a penny or more in the equity and option mkts. Its called price improvement and it is completely legal. It is more noticeable in the options markets since up until recently everything...

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...

They very likely are good prints. With reg nms, market makers/exchanges only have to match the inside market for the size indicated, then they can run through their own book (applies to nyse, amex and nasdaq stocks). ie. if you place a mkt order to buy 5000 shares when a stock is 45.99 x...