I was reading a stock brokerage firm's article on Regulation NMS and Rule 611, which says:
The Order Protection Rule requires trading centers to establish and enforce procedures designed to prevent "trade-throughs"—trade executions at prices inferior to the best-priced quotes displayed by automated trading centers.
(2) The transaction that constituted the trade-through was not a "regular way" contract.
But what is "regular way"? The SEC final rules document says:
“Regular way” refers to bids, offers, and transactions that embody the standard terms and conditions of a market. Thus, this exception applies to a transaction that was executed other than pursuant to standardized terms and conditions, for instance a transaction that has extended settlement terms.
What does this legalese mean? What is "regular way"? Is normal settlement for stocks (T+2) "regular way"? What about cash settlement for stocks and after-hours trades? What about the sale of stock at nominally low prices as part of a contract or will?
(Relevance to personal finance: I want to make sure that I always buy/sell at a price that is at least as good as the National Best Bid and Offer [NBBO]).