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Flash orders, or 'pre-routing display orders', allow a market or exchange to try execute an order when the price is not at the NBBO instead of offering the order to other, rival exchanges. The order information is displayed to an exchange's traders to see if it can be filled at the NBBO price. If it can't it will be cancelled or sent to whichever exchange has the best price. The way the information is displayed before being routed to other markets and for how long varies. It is normally displayed for about 30 milliseconds. The SEC approved flash orders in 2004 as a way of increasing the likelihood that an order would be executed. Just over two percent of U.S. share trading was through flash orders by mid-2009. But as of September 2009 the SEC was preparing to clamp down on them due to concerns that some investors have an unfair advantage in seeing market information before others.
See also: Algorithmic Trading, ECN, Dark Pools, Co-Location