If all brokers have to offer NBBO, what is the tangible difference in trade executions?
- Thread starter CyJackX
- Start date
liquidity and price improvement. Different routes and order type behave differently.
I will comment on the options market:
There are over 1.1 million US equity options. The average bid-ask spread on these securities is OVER $2.00.
Given that the average minimum tick is around .05 - that means there is at least 40 price points between the bid and ask on the average equity option.
A trader needs to understand how to enter orders in order to find the "hidden" liquidity that is constantly present between the bid and ask. You should not be satisfied with the NBBO.
There are over 1.1 million US equity options. The average bid-ask spread on these securities is OVER $2.00.
Given that the average minimum tick is around .05 - that means there is at least 40 price points between the bid and ask on the average equity option.
A trader needs to understand how to enter orders in order to find the "hidden" liquidity that is constantly present between the bid and ask. You should not be satisfied with the NBBO.
it might change, but yeah, the SIP shows you the best round-lot BBO, there could be oddlot liquidity within the bbo
https://www.tradersmagazine.com/dep...s-ii-an-odd-solution-for-the-odd-lot-problem/
https://www.tradersmagazine.com/dep...s-ii-an-odd-solution-for-the-odd-lot-problem/