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I think I understand why NASDAQ doesn't allow stop orders. As I
understand it, on NYSE stocks, a stop order is given to a specialist who
will then change it to a market order when the bid/ask gets to the stop
price. Since NASDAQ has no floor, and hence no specialists, it can have
no stop orders.
How is this different than a limit order? Say the bid/ask on XYZ is
98/100. If I place a limit order for 99, what happens? Does the inside
market change to 99/100 to reflect my new bid?
In other words, how are the mechanics of a stop order different from a
limit order?
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