answer: tighter spreads. We moved from 1/16 (was it? I am not a US trader...-> pennies, which has been good for spreads). The same will happen when people can put in orders at sub pennies.
the main benefit is to expose HFT and leave them nowhere to hide with their infuriatingly cowardly justifications. if you argue against subpennying they say price improvement. if you say, no more two tiered system they no longer have an argument. so it is more of a strategic position to debate with than actually believing that subpennying offers a practical benefit.
yep, agree. Thats why its a good idea to let everybody subpenny. No more dark pool, guess how much longer you even hear the term HFT. It will be gone in no time because all the pathetic incentives they have taken for granted are gone.
I personally don't advocate for sub-penny spread since that will effectively kill the volatility. Moreover, certain volatile stocks like AAPL have never traded within a 1-penny increment. But I do support equal opportunity for everyone. If sub-penny and front running is allowed for HFTs, then extend the same opportunity to the ordinary Joe Sixpack.
Of course does AAPL trade in 1 cent increments. Otherwise how do you get to the closing print of 163.12? While the spread is a function of the stock's underlying volatility it is not the other way around.
Hey you know what? I thought about it and it would benefit all traders if this happens. Its a win win for everyone. Someone wants to make the market then bid sub penny below the offer. The offer saves a penny (nearly) by hitting this bid. Ok im for it if everyone plays by the same rules. But is there any real chance of that happening? BTW yes it was 1/16ths (teenies) and we had much more real liquidity then .
No, you misunderstood me. I concur that AAPL does in fact trade in 1-cent increment. However, the spread is usually anywhere from 7 to 10 cents. (It's been a few years since I looked at AAPL, so that might be different now). My point is that certain stocks exhibit a wider spread even though they "should" technically trade with only 1-cent (that is, 1-tick) spread. If not, what's the need for the regulators to tighten the spread in the first place? You could introduce subpenny spread but if AAPL continues to trade with 10-cent spread, it then makes no difference in the end.
of course, i never implied that most stocks (if any) trade at 1 cent spreads, that would be a dream but would not be feasible because it would take the incentive away for market makers to stick their nose out. I am happy to pay MM in exchange for providing liquidity, a job they have performed long time before I was even born. I only have an issue with entities in this market which serve no useful purpose whatsoever, such as HFT. I would not even care they existed if they were not disadvantaging everyone else. The proponents of HFT have become awfully quiet in here, I assume they ran out of arguments they never had in the first place. Heck, I would also defend my bread and butter at all cost even if it meant I took away money from all others, even if I acted in a grey zone which currently does not violate laws. It does not, however, make them any more useful or less damaging to the marketplace as a whole.
No it's called a "dark" pool because the liquidity is not posted. Nyfix has always been a dark pool but back in the day when we use to game Millennium they would post the volume of the top 25 stocks on their site. To provide transparency into dark pool volumes, in late October 2009 NYSE Euronext revealed a plan to publish dark pool trades through the FINRA/NYSE TRF. Just checking if anything of come of it and if they are being published anywhere cause it's not on their sites. Thanks for the answer smart ass
i was half joking, take it easy pal. And no, I dont know, I just thought its funny that dark pools were introduce just to have people later ask what the volume transacted was, the top volume names and such forth...I think we should all go back to square one, complete transparency.