Series 24: Types Of NASDAQ Orders

Types of NASDAQ Orders

We have already described many of the kinds of market and limit orders that are used on all the exchanges. Below we will list some additional orders that are unique to the NASDAQ system.

• • Auto-ex Order– order that can be executed only by Market Center Participants on the automatic execution functionality of the NASDAQ Book. It would not be eligible for transfer to an ECN or other exchange that charges an access fee to its system. Auto-ex orders are immediate or cancel orders.
• • Pegged Order– a limit order whose price is automatically adjusted to changes in the inside bid or offer.
• » A Primary Peg is a pegged order set to the same side of the market.
• ◊ A primary peg buy order will follow the highest bid and a primary peg sell order will follow the lowest offer.
• » A Market Peg is a pegged order set to the opposite side of the market at a price set at .01 or more off the current market price.
• ◊ A market pegged buy order will be priced at least $0.01 less than the current inside offer.
• ◊ A market pegged sell order will be priced at least $0.01 more than the current inside bid.
• » A Midpoint Peg is a pegged order pegged to the midpoint of the NBBO.

Note: a pegged order cannot be used to establish the market’s