Brokers who route both market and limit orders to wholesalers are generally paid less for their orders than brokers who bifurcate their order flow. Since nonmarketable limit orders have priority over wholesalers at a price, limit orders routed to wholesalers may experience enhanced execution...

An exercise boundary violation (EBV) occurs when the current bid price for an American option in the market is below intrinsic value. A seller at this price leaves money on the table and the buyer receives an arbitrage profit. In a liquid market, competition among dealers should drive up the bid...

Do option investors rationally exercise their options? Numerous studies report evidence of irrational behavior. In this paper, we pay careful attention to intraday option quotes and reach the opposite conclusion. An exercise boundary violation (EBV) occurs when the best bid price for an American...