The Impact of Decimalization

[Baron]

I'd like to hear some of your thoughts regarding the impact of decimalization on your executions. For example, has decimalization affected your ability to get filled promptly? Do you get more partial fills now than you did before? Have you found certain execution techniques or order routes to no longer work well since the swich the decimals?

 

[mikeyv]

I'm not too sure about having slower executions, but I would say that the presence of lower sizes spread out over like 3 cents does make for a more likely partial fill scenario. The decimilization has definitely without doubt closed up the spreads, which is greta for those of us often placing market orders - les being taken by the spread. I also would like to note that squeezing out teenies (which I wouldn't bother even trying right now) has become a lost cause. Perhaps with a broadband connection, but I would say slim picking is the case.

I personally love the decimilization shift, as the market seems loads fairer and more suited to daytrading market trades.

 

[praetorian2]

I really love the decimalization. Especially on the under 10 dollar issues where before it would trade really thick teenies and i'd always execute against the spread, now the spread is less than 3c. When executing size, I also get much better fills on nyse market orders on thinner stocks. I go in to buy 5k shares in a flat market. spread is .05 X .10 500 each way. My fills are then 500@ .1, 1000@ .13 1500k@ .15, 2000@ .18 (.157 avg). Otherwise in the same scenario, spread is 1/8 X 3/16, 500 each way. 500@ 1/8 (.125), 1500 @ 3/16 (.183) 3000 @ 1/4(.25) or .2174. The difference may not seem like a lot, but the difference is .06 or a teeny better fill on 5k average, or 300 saved. I do about 50-150k shares of nyse a day. So the difference in savings is rather large. I don't mind the partial fills, cause I know that my market order has to be filled before anyone elses anyway. I really can't offer any insight into the decimals on nasdaq, but I assume tigter spreads are better for everyone.

 

[ron2368]

I generally do not like the decimals. I find that the bid or ask prices move too much. I never had the problems with executing limit orders like I do now. If I put in an order for a stock thats not heavily traded at a price of say 25.50 I have seen many times the bid will move 0.01 or 0.02 away and I cant get filled, so here I go and change the price. No big deal but I find that I waste alot of time re-entering orders.
I have not had similar problems with nyse issues. Just my experience so far.
RC

 

[praetorian2]

On thinner issues, if you show size, they'll lean on you, so unfortunately, I will have to show under 1k of a 4k position, and after im hit, I'll wait a few minutes and do it again, unless I can coax inca into comming up with size, and then smack him. But this serves me fine since im a swing trader, and I like to scale out on the way up. As for NYSE, the extra penny or 3 doesn't matter to me as long as im filled. In that case, I just wait for the specialist to close the spread, and I execute at market.