inet clearing out price levels but leaving arca

Q

quin8670

Have you guys noticed that sometimes on a stock it will clear out all the new york book orders (inet, isi, etc) at prices a few cents away from the bid/offer but leave the island and arca orders there. So the person buying/selling is getting bad prices...

Anyone know why or how this happens?
 
On the NYSE, this is from market orders. Market orders just sweep the open book; they don't route out to other market centers. Reg NMS, once fully implemented, will eliminate this. There's still some arbitrage money to be made from enveloping the inside market.
 
Quote from FXTraderWill:

On the NYSE, this is from market orders. Market orders just sweep the open book; they don't route out to other market centers. Reg NMS, once fully implemented, will eliminate this. There's still some arbitrage money to be made from enveloping the inside market.
More...

I don't think your explanation is correct. Can you cite exact sources to support it?
 
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