Order Protection Rule (Rule 611)

Definition

Order Protection Rule (Rule 611) in plain English

Since a stock trades on many exchanges at once, one venue might be showing a better price than the one you're about to trade at. The Order Protection Rule (Rule 611) makes it illegal for an exchange to fill your trade at a worse price when a better, reachable price is publicly displayed somewhere else — that bad fill is called a 'trade-through,' and this rule bans it. In plain terms, it forces the market to honor the best posted price for you instead of quietly giving you a raw deal. It's like a law saying a store can't charge you $10 when the shop next door openly advertises the same item for $9 and you could've bought it there.

Learn these first

• Sub-Penny Rule (Rule 612)
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Practice Order Protection Rule (Rule 611)

A regulatory rule prevents an exchange from executing a… This is a direct application of which Regulation NMS rule?

Related Market Microstructure terms

• Access Rule (Rule 610)
• Call Auction
• Continuous Auction
• Iceberg Order
• Limit Order
• Limit Order Book (LOB)
• Maker-Taker Fee Model
• Order-Driven Market
• Price Priority
• Price-Time Priority