SEC Weighs Bringing Back Fractions in Stock Prices

Quote from traderchi128:

If they went back to fractions (which they should) the bots/HFT guys would be wiped out. With 1/16 ths and only 6 price points each dollar they wouldn't be able to play the bullshit games they do now.
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If you traded then then you would notice fractions 1/32, 1/64 and I think there were even 1/128 and 1/264 or something like that. Fractions would just open another way of gaming the market which is playing the spread. Retail would be sitting on 1/16 or 1/8 spread and the game would go inside NBBO as it does today. The only think different for retail would be higher transaction cost.

Volumes may have nothing to do with HFT. Possibly all the money is sitting in treasury markets, currencies and derivatives because of the stream of negative news and demographics (aging population).
 
this thread is mainly a bunch of whiners who will whine again that there is nobody on the opposite side of their trade if fractions return.

according to wsj this proposal is being pushed by small investment bankers who claim the ipo market has been killed by penny spreads because there is no money being made in market making to subsidize research departments etc.

wall street never changes. the pros are always trying to get a rule advantage to screw the small guy. raising costs to trade is not going to bring them back.
 
----according to wsj this proposal is being pushed by small investment bankers who claim the ipo market has been killed by penny spreads because there is no money being made in market making to subsidize research departments etc.---

ipo market been killed for reasons i described long time ago-US is not a land of opportunity anymore. too many taxes,too many obligations,rules,regulations etc. like i said 5 years ago-i track number of US companies traded on US exchanges-no single uptick since i start doing it.
 
The IPO market has been 'killed' because people compare current IPOs numbers to the 90's and early 2000s, a period where the market was massively overvalued. When anything is overvalued there is an incentive to provide supply of that something. When you can just open a little business and IPO a year later at a profit over your cost of building it people do that like crazy, this happens in every market including in stocks and housing. Thats what happened, right now you just have return to normalcy combined with global competition
 
Quote from vicirek:

If you traded then then you would notice fractions 1/32, 1/64 and I think there were even 1/128 and 1/264 or something like that. Fractions would just open another way of gaming the market which is playing the spread. Retail would be sitting on 1/16 or 1/8 spread and the game would go inside NBBO as it does today. The only think different for retail would be higher transaction cost.

Volumes may have nothing to do with HFT. Possibly all the money is sitting in treasury markets, currencies and derivatives because of the stream of negative news and demographics (aging population).
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The Bid Ask spread on NYSE was 1/8. Stocks traded only in 1/8th increments. What you are saying did not exist. There was absolutely no gaming going on in between back then.
 
Quote from Bob111:

[Bipo market been killed for reasons i described long time ago-US is not a land of opportunity anymore. too many taxes,too many obligations,rules,regulations etc. like i said 5 years ago-i track number of US companies traded on US exchanges-no single uptick since i start doing it. [/B]
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Exactly. Reasons are in plain sight for everybody to see but not many want or are able to notice it.
 
Quote from zdreg:

this thread is mainly a bunch of whiners who will whine again that there is nobody on the opposite side of their trade if fractions return.

according to wsj this proposal is being pushed by small investment bankers who claim the ipo market has been killed by penny spreads because there is no money being made in market making to subsidize research departments etc.

wall street never changes. the pros are always trying to get a rule advantage to screw the small guy. raising costs to trade is not going to bring them back.
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Who is whining ?
 
This seems extremely misguided to me as it will greatly increase the incentive for B/D's to internalize and/or sell order flow to wholesalers such as Knight. Net result: even less volume going through the visible markets, and even wider spreads, as those who have the guts to put their bids/asks out there will be subject to even greater adverse selection.

If a company wants to generate interest in their stock, maybe they should pay for it themselves, rather than resorting to some indirect, transactional "bribes" paid as a hidden expense by the retail investor.

My guess is that this proposal will be a fiasco without a concurrent, complete ban on all B/D internalization and/or sales to wholesalers (and perhaps a ban on all non-exchange venues, including dark pools, for the affected securities, as well).
 
Quote from Occam:

This seems extremely misguided to me as it will greatly increase the incentive for B/D's to internalize and/or sell order flow to wholesalers such as Knight. Net result: even less volume going through the visible markets, and even wider spreads, as those who have the guts to put their bids/asks out there will be subject to even greater adverse selection.

If a company wants to generate interest in their stock, maybe they should pay for it themselves, rather than resorting to some indirect, transactional "bribes" paid as a hidden expense by the retail investor.

My guess is that this proposal will be a fiasco without a concurrent, complete ban on all B/D internalization and/or sales to wholesalers (and perhaps a ban on all non-exchange venues, including dark pools, for the affected securities, as well).
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maybe the people who bailed out knight capital are looking for an outrageous return on their investment.
 
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