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Nasdaq Defends Dark Options

Traders Magazine, February 2008

Nina Mehta

Nasdaq failed to win Securities and Exchange Commission approval for its new options market, but is still standing by a controversial aspect of its proposal. Nasdaq had expected to launch the Nasdaq Options Market in December, but the SEC did not rule on Nasdaq's proposal. The International Securities Exchange and Citadel, the exchange's most vociferous critics, charged that Nasdaq's various non-displayed order types violate the SEC's Rule 602, or firm quote rule, and encourage internalization. Rule 602 requires exchanges to publicly disseminate their best bids and offers and the sizes associated with them.

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