• filter:

stock increments

  • Page :
  • 1
  • Text Only
  • Search this Topic »
Voting History
rated:
Does anyone know why equities trade in one cent increments, but when you look at "Time & Sales" , you see all kinds of increments.

Example:  18.185,  18.1825  etc.  How does one place these types of limit orders?

Member Summary
Staff Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

rated:
Outside of stocks in the Tick Pilot, it's possible to have sub-penny trades. You can't quote at an increment less than a penny (unless the price of the stock is <$1), but it can trade there. A very common example is "mid-point" trades. If a stock is quoted at 18.18 x 18.19 and two orders have entered the market to buy & sell at "midpoint", then they can get crossed at 18.185 if they're at the same venue. Since you can't quote sub-penny, they need to be hidden orders (automatic in a dark pool, but still possible on an exchange), but there's nothing wrong with trading, e.g. 100 shares at 18.185 ($1818.50 will move at settlement).

rated:
thanks for your answer.  I'm still confused though !!!
1. How do you enter a trade at the midpoint?

2. What is "hidden"?

3. What is "in the dark"?

rated:
just looking at SPLS being quoted at 10.18-10.19

Lots of trades going through at 10185, but also trades going through at 10.1825, 101801, 10.1859.

How is that possible.

rated:
Retail traders don't always have access to custom order types used by exchanges. You may or may not have access to them. Honestly, they don't matter that much to retail traders, it won't make a difference to a day trader's pnl. Just put in limits for your orders.

These order types are there for algos that trade a lot and need a $0.0001 edge.

I said that mid spread orders are common in dark pools, and that's like an exchange where the order book doesn't get published on the market data feeds. There are many dark pools of various kinds, more than I care to elaborate about on my phone. Google is your friend.

I'd recommend quite a bit more education before trading. If you're simply a buy and hold index etf investor, none of this matters. But if you're actually trading, know how the market works before the house takes all your money.

rated:
if I want to but 1000 shares XYZ at market and its about $20.10
buy when i go to buy the price moves to 20.15
at market I might get some at 20.10 and some at 20.15 for a total of 1000 shares
it will show the trade at the average price for my 1000

rated:
dbartolet17 said:   if I want to but 1000 shares XYZ at market and its about $20.10
buy when i go to buy the price moves to 20.15
at market I might get some at 20.10 and some at 20.15 for a total of 1000 shares
it will show the trade at the average price for my 1000

  If you want $20.10, you put in a limit order for $20.10.

rated:
Two new members on this thread. Either this is homework, or this thread is going to turn into spam.

rated:
I use Fidelity Investments for my regular stock trades such as AMD or ARR or T. If you can watch the tape while the market is open, you can commonly see reports of trades at say 13.2824 or 13.2850. You can only place orders in whole cents such as 13.28 or 13.29. Trades may fill at either or somewhere in between. This is more common when orders are placed "at market" which means whatever is happening at that moment. You do not place a specific price in your order to buy or sell. You just take whatever the market gives you for your activity.

I use Active Trader Pro to watch what is happening.

rated:
dbartolet17 said:   if I want to but 1000 shares XYZ at market and its about $20.10
buy when i go to buy the price moves to 20.15
at market I might get some at 20.10 and some at 20.15 for a total of 1000 shares
it will show the trade at the average price for my 1000

  
Not in the market it won't. The prints on the tape will show some trades at 20.10 and some trades at 20.15. Your broker might show you the average price in your account that will potentially be sub-penny, but the only time those types of trades hit the tape is if there is something like a principal vwap trade that needs to get reported to the regulatory facility. 

Where retail traders see sub-penny trades is when the broker sends to a wholesaler first. For instance, I might send an order to the market to buy at 20.10 through TD Ameritrade, but they'll send it to UBS first who will fill me at 20.0999 if they like the trade. That would print to the tape as 20.0999 and show in my account at that price too. In other words, "Price Improvement" is another common way you'll see sub-MPV trades reported.

rated:
By the way, PSA for anyone fretting about sub-penny trading, custom order types, dark-pools, wholesalers, etc., please remember that your broker commissions >> all of these other things. Commissions will take you out before mid-spread trading does anything potentially bad to you.

  • Quick Reply:  Have something quick to contribute? Just reply below and you're done! hide Quick Reply
     
    Click here for full-featured reply.


Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017