new order types that allow firms to sweep liquidity at one exchange only( ie not rout-able orders) You say that like it's a bad thing. My understanding is that

new order types that allow firms to sweep liquidity at one exchange only( ie not rout-able orders) You say that like it's a bad thing. My understanding is that an "intermarket sweep order"[1] (aka ISO) is essential to the proper functioning of the market. Otherwise, here's what used to happen all the time: - the "true" market for XYZ is $10.00 bid, $10.01 offer. (Let's ignore the mantra of relativity that "simultaneity does not exist"). - in this case lets assume NASDAQ prices currently reflect that "true" market, and prices disseminated by NYSE are stale. - a buy order arrives at NASDAQ, willing to buy at $10.01 - NYSE is supplying stale data, claims it has stock for sale at $10.00 - without ISO, NASDAQ can't allow the transaction to occur at $10.01, but is obligated to respect the stale data it is receiving from NYSE. NASDAQ must reject the order, or route it to NYSE. - SUCKERS! the NYSE quote was stale, but the order was not transacted on NASDAQ. And, there is no longer any stock for sale at $10.00 at NYSE, so it won't be filled there either! Here's an article that claims that ISOs are a form of protection against high frequency traders:[2] Brokers that don’t use ISOs in fast market conditions disadvantage their clients and subsidize the profits of HFTs That article was from 2012, but does illustrate the problem that ISOs were attempting to solve. It's not a panacea, because as the article points out, HFTs are also free to use ISOs for their own purposes. [1] https://en.wikipedia.org/wiki/Intermarket_sweep_order https://en.wikipedia.org/wiki/Intermarket_sweep_order [2] http://tabbforum.com/opinions/why-hfts-have-an-advantage-part-3-intermarket-sweep-orders http://tabbforum.com/opinions/why-hfts-have-an-advantage-par...