Penny spreads going away

[ChkitOut]

ok, im exaggerating for dramatic effect but here is an article for your reading pleasure..

The Securities and Exchange Commission is preparing a review to see if raising the minimum trading increment for so-called "emerging growth companies" and other small-cap stocks could increase liquidity in these thinly traded names.

The Schweikert Amendment, named after Congressman David Schweikert, R-Ariz., requires the SEC to study the effects of the transition from fraction trading to decimal trading, which occurred in 2001.That move, encouraged by Congress, cut the minimum trading increment from 6.25 cents to a penny

http://www.tradersmagazine.com/issues/25_337/sec-tick-small-cap-109996-1.html?pg=1

 

[Bob111]

penny spreads? you better wake up SEC.....

not sure what they are trying to say ...but....it's not uncommon to see spreads as big as 5-10% intraday on stocks with 30-250K avg.vol. it's sounds funny, if ask me..

 

[stock777]

saw 1 today 1.75 X 2.50 , not pink sheet either

I just sat there all day buying at 1.76, and selling at 2.49. got boring though.

 

[Bob111]

One source familiar with the SEC's thinking said that increasing spreads would change the direction of recent market reforms, such as decimalization and Reg NMS, both of which have led to tighter spreads and, presumably, better prices for investors.



While the regulator is already bus with Dodd-Frank and the Volcker rule, the SEC will take the time to study the topic further, he added.