Stock and options exchanges vary in their comments to the Securities & Exchange Commission (SEC) regarding a rule that would outlaw giving big players an early peek at market orders.
The rule, which the SEC proposed last year, would ban the practice commonly known as “flash orders,” which allow certain traders to get a feel for incoming market activity just before the rest of the market -- typically by fractions of a second.
NYSE Euronext and Nasdaq OMX Group support the ban in both stocks and options. CBOE, meanwhile, wrote that flash orders save its options customers money and stated that more research is necessary to show the practice harms other options users.
Proposed Rule: Elimination of Flash Order Exception From Rule 602 of Regulation NMS