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But limit orders are not foolproof.
But were there really that many foolish limit orders?
Presumably the orders were limit orders, to buy at a particular price.
Customers place limit orders to trade at specified prices rather than at current market prices.
The exchange said that last December, it handled just over six million limit orders.
They generally placed limit orders, which are filled at or below a set price.
The Nasdaq, by contrast, already gives investors some information about limit orders, and more is coming.
If sellers had placed "limit orders" instead, those transactions would not have happened, Professor Harris said.
"Limit orders are in my judgment the absolute stimulant of price competition," said Arthur Levitt, the S.E.C. chairman, "and either neglect or inattention to the rules that empowered limit orders is an assault on the price-setting process".
Since limit orders make up two-thirds of Nasdaq orders, this number may not seem large, he conceded.
But limit orders benefit investors only if their brokerage firms actually post the orders for others to see.
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