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Where would a broker place your stop order? Nasdaq stocks have multiple
market makers, all at different locations and with different phone numbers.
( unless this has changed) There a re situations where none of these market
makers would show the same market and until recently your bid or offer Which
was between their markets was not posted or recognized and often traded
around until a market maker decided to take it. If the broker takes your
stop, then he is taking the responsibility to see that it is executed
properly. Many brokerage houses do not want that responsibility. I can't
blame them. On the NYSE your stop would be placed in the book and executed
during the normal course of business or a floor broker, who stood in that
pit, would execute it when the price was hit. Ira
TheGonch at MediaKat wrote:
> I believe there are three types of OTC stocks, but that has nothing to
> do with stop orders.
>
> 'OTC' Stocks are either:
>
> 1) part of the Nasdaq Stock Market (eg, MSFT, INTC);
> 2) part of the OTC Bulletin Board (SJKI);
> 3) on the Pink Sheets
>
> I do not believe there is any official rule about stop orders on Nasdaq
> stocks; it is up to the broker's discretion. They can decide to take the
> order for MSFT, but refuse to take it on EFII, even though both are NSM
> stocks.
>
> For lots of information (although a little confusing in presentation)
> try
> http://www.nasdaq-amex.com/help/helpfaq.stm
>
> Regards
> DanG
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