tick experiment to end.

Discussion in 'Trading' started by zdreg, Apr 20, 2018.

program will end in october?

  1. yes

    3 vote(s)
    50.0%
  2. no

    1 vote(s)
    16.7%
  3. no. wall street firms will not allow it to end.

    3 vote(s)
    50.0%
Multiple votes are allowed.
  1. zdreg

    zdreg

  2. R1234

    R1234

    Glad to see that crap go. When I trade many of these small caps I am only able to execute in 5 cent increments but there is trading quoted and happening in fractions of a cent!
     
  3. zdreg

    zdreg

    don't you mean to 3 or 4 decimal places? where do you see quotes (not executions) in between on stocks trading in 5 cent increments.
     
    Last edited: Apr 20, 2018
    Clubber Lang likes this.
  4. R1234

    R1234

    the quote fluctuates to the 4th decimal place but I can only transact in $0.05 increments.
     
  5. Zdreg is correct
    You mean Executions not Quotes
     
  6. Read the link, I am no expert but program just sounded silly. Let the market work out the bid ask spread.
     
  7. zdreg

    zdreg

    a free market does not mean no rules. while i consider this program as a power grab by old line firms and detrimental to the public , it was worthwhile as a short term experiment. fortunately for retail traders it looks like it is coming to an end
    unfortunately,Wall Street nearly always looks to screw the public and to create special privileges/exemptions for themselves. . market making firms will fight tooth and nail to keep this experiment alive and to expand it in some form if possible.
    I will believe it is finished when the experiment is officially over.. as yogi berra: "once said it ain't over till it is over."
     
  8. Oh I agree zdreg about regulation, it just seemed to me that the bid/ask spread would be the sort of thing, absent manipulation, would basically take care of itself. In other words, if the bid ask spread is 1 cent, you have a very liquid market. If its TOO liquid, and the market makers can't make money on the 1 cent spread, some would leave until the spread got bigger. If a stock has a 10 cent spread, and market makers are making money hand over fist, others would enter the market until the spread narrowed until no excess profit. Just seems something the market would be better setting on its own rather than some regulators trying to set what the spread should be.

    Coming at it another way - think about the universe of the 3 market situations the minimum 5 cent tick (spread) could affect:

    1. Bid-ask spread is already greater than 5 cents, the rule would have no effect.

    2. Bid-ask spread is equal to 5 cents, the rule again would have no effect.

    3. Bid-ask spread is less than 5 cents - presumably the market is already plenty liquid hence the low spread, so all you are really doing in this situation is shifting money from the wallets of the retails, etc. to the pants of the market maker - but why would you do this when they were already making money with the smaller than 5 cent spread (which we know because they are choosing to be there and make the trades instead of leaving and not making the trades), and the retails, etc. already had a plenty liquid market?

    I dunno, just seems funny. Thanks.
     
  9. d08

    d08

    Are you sure your broker doesn't have the wrong tick sizes?
    I have experienced sub-penny executions but only with midpoint orders on the pilot program participants. I've yet to see 1 cent or high quotes.