There were also significant limitations implemented to prevent day traders from exploiting the system and taking advantage of old prices quoted by market makers.
[2] Although SOES was intended for use by retail investors, by 1995 more than 80% of its users were day traders, who used the system because its automatic execution gave them a trading advantage,[3] although licensed broker-dealers were prohibited by Nasdaq rules from using SOES to trade for themselves.
[4]: 81 Since much trading on Nasdaq was still done by human market makers, day traders (derisively nicknamed "SOES bandits") could exploit slower human reaction times to profit from scalping outdated price quotes when the price for a stock shifted.
[3] In July 2001, Nasdaq rolled out an upgrade to SOES, dubbed "SuperSOES", that raised the cap on trades in a single transaction from 999 to 999,999.
[5] There were several restrictions for those who used SOES, rather than a traditional electronic communication network (ECN), to place their orders.