Intermarket sweep orders (ISO) is a type of stock market order that sweeps several different market centers and scoop up as many shares as possible from them all. These work against the order-protection rule under regulation NMS.
For example, if a trader is trying to buy 1000 shares of X, and there are 100 shares of X being offered at $1 at one exchange and 2000 at $1.10 at another exchange, the order protection rule would let you buy ONLY those 100 shares at $1, after which you would need to send in other orders. With the ISO, you can buy the 100 shares at $1 and the remaining 900 at $1.10 on the other exchange subsequently.
References
- "FINRA ISO Reporting Rules" (PDF). FINRA. February 4, 2008.
- "SEC NMS Rule FAQ". Securities and Exchange Commission. April 4, 2008.
- "Accenture's Flash Crash: What's an "Intermarket Sweep Order"". The Wall Street Journal. May 7, 2010.
- "What Actually Happened During the Flash Crash". Minyanville. June 30, 2010.
- "Interactive Brokers Online Knowledge Base - Intermarket Sweep". Interactive Brokers. Retrieved July 30, 2018.
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