2.1.1.3.2 No Stub Quotes
A stub quote is a quote that is so far away from the prevailing market it is not intended to be executed. Stub quotes were used in the past by market makers when they did not want to trade at certain prices but needed to meet their two-sided trading obligation. On May 6, 2010, a deep drop in the market triggered the execution of a large number of trades against stub quotes. Now the SEC requires market makers to post continuous two-sided quotes within a certain designated percentage of the NBBO (see table below) for NMS securities during market hours. These requirements hold for both NASDAQ and Alternative Display Facility (ADF) quotes.
NASDAQ Rule 4613, FINRA Rule 6272 (ADF), and SEC Rule 610