Sometimes it amazes me how clouded everyones' opinion is on EVERYTHING. "Everything is that damn MM's fault!" I can assure you people, daytraders have missed a TON more fills since MM'S have been able to step in front of you by a penny. A five cent increment would benefit virtually everyone associated with the industry, including the daytrader. In fact, probably the most visible result for the daytrader would be the ability to once again do some reliable tape reading.
Well I have read both sides of the argument in this thread, and the other one like it. I have been trading now for 5 years. The last 4 ½ years I have only been trading NYSE stocks. Many of you havenât been trading that long or at least not in the capacity that you are now. If you did then you would know why some traders want to go back to nickels. At the time pennies were instituted I was peaking. Trading pennies took some time getting used to, but I have had many excellent months since then. So, itâs hard to say from a trader point of view (at least my point of view) if pennies are the problem, or is it the general market and economic conditions that are the problem. There is a lot of money sitting on the sidelines since 9/11 waiting to come back in. When mutual funds, pensions funds and foreign money start to buy this market again maybe we will get some real follow through and pennies wouldnât matter. For those of you who say that pennies benefit the small investor, who gives a rats ass. We are traders not investors.
look, the spreads have narrowed since decimiliaztion... the QQQ spreads are really tight... not even a nickel... so if you are worried about it, just hit the offer, you'll do better than nickel spreads. i see nothing in this thread that is blaming everything on the MMs, but you probably understand why they pay for order flow, right? this actions isnt being taken as a result of a huge outcry from small investors is it? the theives are getting squeezed for a change, so they run to their political hacks! BTW, keep your assurances, the market operates just fine without them. the basis of my arguement is that there is no need for an artificial spread. open the market, let it operate, and that includes firing the crooks and opening the isld book back up.
And if I paint my car red, I'm sure it will drive faster. Why does it seem like its one specialist with 10 different handles promoting this (or should I say Vinny's nickle spread thing).
I prefer to make stock exchange into Globex concept. There are no middle man, 1tick you can still make a profit on it after paying commission.
Here is a partial quote from Thursday's Financial Times on the topic: _______________________________ "Sharply divergent views emerged on Wednesday in response to a call by the chairman of the Securities and Exchange Commission for a review of decimalisation, which ended the practice of trading US stocks in fractions. William Donaldson, who used to run the New York Stock Exchange, said he believed decimalisation had cut deeply into the profits of marketmakers. Wall Street brokers have long complained that the switch to trading in one-cent increments had badly damaged their businesses, exacerbated by a three-year bear market. Mr Donaldson also said trading in one-cent increments may have cut liquidity in the stock market and raised rather than cut the cost of buying and selling stocks. "I think the whole issue really needs to be looked at," he said in an interview on CNBC television late on Tuesday. His comments coincide with a continuing investigation by the NYSE and the SEC into possible malpractice by specialists on the exchange's trading floor. Among the charges is that they intervened excessively between buyers and sellers to make unauthorised profits. The switch from fractions to one-cent increments raised the number of prices at which a stock can be traded from 16 - increments of 1/16 - to 100. This reduced the "spread" between the prices at which a stock is bought and sold, which had been a lucrative source of profits for brokers and specialists. Meyer Frucher, chairman of the Philadelphia stock exchange, welcomed Mr Donaldson's statement. "When trading firms can't sustain their business, liquidity evaporates, and the overall quality of the markets is diminished," he said, adding that transparency had been lessened. He said the SEC and Congress should "recognise that decimalisation may be a failed experiment". The NYSE declined to comment, and the Nasdaq stock market did not return a call seeking comment. Benn Steil, an exchanges specialist at the Council on Foreign Relations think tank, said the comments suggested Mr Donaldson was more concerned with brokers than with investors. If trading costs were still high in US stock markets, the problem was structural rather than due to pricing in cents. "The only question is whether decimalisation is in the interests of investors, and it unambiguously is," he said. The introduction of decimalisation brought the NYSE, Nasdaq and other US stock exchanges into line with stock trading practices around the world. "You don't hear brokers in London arguing for a return to pricing shares in shillings," Mr Steil said."
Man, I love this one. Drop everything America -- we've got a decision to make! (Nickels are the greatest, I heard they will even help me shed a couple of pounds, is that true?) Seriously, threads like this highlight how desperate day trader types are for the halicon bubble days; they must really be suffering if they are so ready and willing to believe changes in peripheral knicknacks will really improve things. It's not nickels or pennies that make the difference, it's volatility (and volume) you need.