'Brief' NYSE System Error May Have Affected Prices
January 17, 2013
But the “trade through” rule may not be necessary to achieve “best execution of orders,’’ says Georgetown University markets expert James J. Angel.
"Here's the thing,’’ he said. “The trade through rule sounds great, in theory. Oh, yes, everybody has to get the best price. But, you know what? Brokers already have a duty of best execution to their clients.’’
Number one, brokers then and now are in the business of working their hardest to get each client the best price. “You don't really need to dump it on the exchanges,’’ he said.
Number two, the trade-through principle is carried out in trading platforms, any way. To get business, the electronic exchanges promise brokers “give us all your order flow and if we don't have the best price, we'll route it out,’’ Angel said.