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NYSE Increments
- Thread starter ArbProfit
- Start date
Quote from ArbProfit:
I use NX dozens of times a day and myself, along with all of the successful NYSE traders I've asked, have no idea about any 5 cent rule. Nobody on this thread has been able to explain exactly what the rule is, except that it's only applicable to Direct X users, which I am not.
Uhm,
Being that you use NX soooo much and soooo successfully, you should be able to figure it out. It's quite simple.
Personaly I am amazed that someone claiming to make 10K a month trading only listed has no idea what the 5 cent rule is. It was a big deal when the rule was enforced in the past year, especially for those scalping shorts.
Obvioulsy I wouldn't have posted this question without expecting responses like yours. I don't come on these threads to brag about income or to cut down other people. I've made no false claims and am not too proud to ask questions when I'm uninformed. After hearing about the "5 cent rule" I made a few calls and was unable to find out exactly what it was. If it's true that you cannot NX more than 5 cents away from the market then this rule is really irrelevant to me because in MOST cases it would be foolish to do so anyways. Most stocks I trade have very tight bid-ask spreads, reducing even further the importance of this rule to my trading.
Quote from ArbProfit:
Obvioulsy I wouldn't have posted this question without expecting responses like yours. I don't come on these threads to brag about income or to cut down other people. I've made no false claims and am not too proud to ask questions when I'm uninformed. After hearing about the "5 cent rule" I made a few calls and was unable to find out exactly what it was. If it's true that you cannot NX more than 5 cents away from the market then this rule is really irrelevant to me because in MOST cases it would be foolish to do so anyways. Most stocks I trade have very tight bid-ask spreads, reducing even further the importance of this rule to my trading.
The ability to NX any price away made a lot of people A LOT of money. Mostly on scalping shorts with bullets but also giving new day highs and new day lows. Or when a stock spreads 15 cents and has some size it allows the trader to instantly get out or get in instead of having your order held to god knows what price.
This rule was put in to hinder the day traders ability to just trade and not get locked up to specialist mercy. I also think NYSE got sick of the short scalpers taking sizes down 20-40 cents with 100 share ticks. I think it was quite important, at least enough to know the rules about NX.
forget about the 5 cent nx rule. when are we going to go to .05 minimun spreads instead of .01? anyone hear anything further on this? heard this a while ago.