If someone is publically offering to buy a stock for $10.00 on Exchange A (i.e. they've placed displayed limit order), then it's illegal for you to sell that stock to someone else for $9.99 on Exchange B. If that trade did happen, the order on Exchange A is said to have been "traded through". The rule protects limit orders which have the best price available from missing out on a trade just because they were sent to the wrong exchange.
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If someone is publically offering to buy a stock for $10.00 on Exchange A (i.e. they've placed displayed limit order), then it's illegal for you to sell that stock to someone else for $9.99 on Exchange B. If that trade did happen, the order on Exchange A is said to have been "traded through". The rule protects limit orders which have the best price available from missing out on a trade just because they were sent to the wrong exchange.