Why Would An Exchange Create An Order Type Designed NOT to Trade?

25

July, 2012

We thought that stock exchanges were in the business of matching buyers and sellers.  It’s a fairly simple process – place a bid on an exchange, seller sees it, seller hits the bid and trade is executed.  Well, we all know by now that this is not exactly how the stock market works anymore.  Exchanges and dark pools have figured out ways to circumvent this simple process so that the their highest volume clients can step in between and siphon off some risk free profits.  Today, we would like to

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