Odd lot orders: who pockets the change?

Discussion in 'Trading' started by Option Trader, May 14, 2008.

  1. I placed an order to buy 100 shares of DRL at $20.24 after hours yesterday, and 98 shares were filled at $20.24. I found out a colleague of mine was selling 98 shares of DRL at $20.20 at the time, and that's what he got. Who pockets the change? His broker? My broker? Or a third party?

    Is that legal?
  2. sprstpd


    Probably arbed by a third party. Legal.
  3. What about NBBO? (Investopedia describes NBBO as: "A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.")

    Also, who in the world is able to monitor that I placed my buy order at $.04 higher than his ask, then quickly submit the order faster than my already submitted order, then quickly sell to me $.04 higher?
  4. sprstpd


    NBBO doesn't apply in afterhours.

    I am just guessing here, but he might have had his order on a different ECN than where your order got routed to. So say his order was on ISLD and your order went on ARCA. Those two orders won't match with each other if they are directed specifically to those ECNs.

    Depending on how fine your broker gives your execution times, you could compare your time with your friend's time. They are probably different.
  5. Both sides were filled at exactly 18:32:58 05/13/08.
  6. sprstpd


    I am talking about millisecond precision here. I wouldn't expect there to be a difference in second resolution.