Not that I want to encourage odd-lots, but can someone specify exactly which SEC/NYSE/NASD rule is being violated prima facie simply by the entry of an odd-lot order? I say this because I believe there is no such general rule. I'm aware of the following facts: 1. NYSE, specifically, has some rules with regard to entering odd-lot orders because of some abuses that were made possible when Direct+ came along. I don't remember the specifics, nor what the exact rule was, but I remember that IB complied by preventing odd-lot orders to open new positions from being sent _anywhere_. They were eventually covinced that this was specifically an NYSE restriction and that it had no bearing on the ECNs, at which time odd-lots were again allowed to be routed to the ECNs, regardless of current position. 2. Some time ago, ARCA started charging $0.03/share (yes, at least 10x the normal fee) for orders entered for odd-lots. Obviously, brokers that charge an all-in per-share rate cannot absorb this, and have reacted with various restrictions. Some were slow to notice the missing '0' in the rate schedule 3. ARCA and NYSE have rules that specifically prohibit unbundling/shredding/painting the tape with multiple odd-lot orders when a single, larger order would suffice. Assent has a rule prohibiting orders of less than 50 shares to open a new position, probably to improve compliance with this rule. It could also be that they simply do not want people to intentionally do such small trades (for commission reasons). It's unclear whether such a restriction is intended to (or can legally) apply to retail traders.
Remember I am a an exchange member through my partnership. There might be other rules for us. I find it strange that it should be illegal to enter an odd lot position to ECNs. I havent found any rules indicating this. I asked the compliance manager 8 months ago if I could trade 1 share when testing strategies. He said OK. Now suddenly this is illegal. There is no way he could have misunderstood me in the first place.
When in doubt, pick up a phone and call... it may take a few transfers before you get someone who knows what they're talking about, but you can hear their policies, anyway. Or, they'll direct you to a link where you can read 'em.
Odd lots cost more for Nasdaq stocks going via ARCA too http://www.archipelago.com/traders/equities_fees.asp Listed Securities $0.03 per share (applicable to all orders initially entered as odd-lot orders and executed against the NYSE Arca book or by another market center) Nasdaq Securities $0.004 per share (applicable to all orders initially entered as odd-lot orders and executed against the NYSE Arca book or by another market center)
This is interesting to me too. I used to trade prop, now retail, and might venture back into prop (soon). I'm quite sure I used to enter with mixed lots on occasion while at prop, and can't say I've ever heard of there ever being an issue with odd or mixed lots. I personally wouldn't have paid attention to this if two solid vets hadn't noted this, so if anyone else who knows what rule is being violated could confirm, I think a lot of us would benefit.
http://www.elitetrader.com/vb/showthread.php?s=&postid=2761118#post2761118 I should have said mixed lot for orders over 100.
We send orders over 100.... 140 for example, but not under 100 (not 40). That's how the rules are. Don
What's the difference between under 100 shares(for example 40 shares) and over 100 shares(for example 140 shares)? Why is one legal and another illegal? What are the consequences if you trade odd lots a lot?
If you trade retail, odd lots shouldn't be a problem. But if you're a licensed trader, you're considered to be a "pro" and are expected to be accountable for at least 100 shares at a crack.