Who thinks .05 increments work better ?

[gotta_trade]

Right now, I really don't think it would make a difference.

There is a complete lack of momentum, force, and conviction in the marketplace. We need all of those things to have solid, bold, and meaningful moves.

In my opinion, it doesn't matter what the spreads are, it will be difficult to capture profits in the marketplace at this time.

Notice when we have those "meaningful" moves, (even if it is short lived), that's when most of use make our money.

 

[bundlemaker]

I realize traditional scalpers would like larger increments. But some of us love penney increments. The ability to get in and get out in a hurry and lose only a penney or two is fabulous. It has saved me a ton.

 

[chasinfla]

yeah. it's great when you get filled for a hundred shares at your number. the problem is when the other 900 get filled 20 or more cents away.

 

[MondoTrader]

" I remember seeing called teenies way back when (2 yrs ago). "

My thoughts exactly. A teenie was small enough for any NYSE listed stock. A teenie was about 6 1/4 cents. 5 cents would still be a bit smaller but easier to do the math and provide good liquidity at each price level. Going to nickels might have been an improvement all the way around, but this one penny crap is not really helping anything as far as I can tell.

 

[daniel_m]

Quote from chasinfla:

yeah. it's great when you get filled for a hundred shares at your number. the problem is when the other 900 get filled 20 or more cents away.

and fractions, of course, take care of all that..

you might wanna check out these fancy suckers called "limit orders" too...

 

[Lobster]

Quote from daniel_m:



and fractions, of course, take care of all that..

you might wanna check out these fancy suckers called "limit orders" too...

I couldn't have said it better myself.

 

[Lobster]

Quote from MondoTrader:

A teenie was about 6 1/4 cents.

give or take

 

[Vinny Gigante]

that fractions or .05 decimalization accomplishes is it de-personalizes ALL the orders. Also important is that with fewer increments per dollar, the size of the bids and offers increases.

Yes, it was different with decimalization! I never got pennied to death!

There is NO reason to have each order stand alone. When you individualized EVERY order by pennies, it destroys the integrity of large bids and offers ie. the whole market.

Some people on this board will argue if the sky is blue.

Vinny

 

[Mark Hansen]

generally speaking,
I think the more options available to a skilled trader,
the better

there are more options having pennies

 

[PuffyGums]

Quote from Vinny Gigante:

that fractions or .05 decimalization accomplishes is it de-personalizes ALL the orders. Also important is that with fewer increments per dollar, the size of the bids and offers increases.

Yes, it was different with decimalization! I never got pennied to death!

There is NO reason to have each order stand alone. When you individualized EVERY order by pennies, it destroys the integrity of large bids and offers ie. the whole market.

Some people on this board will argue if the sky is blue.

Vinny

In futures they call this running paper and is considered a huge negative. The idea is that when orders come in off the floor, floor traders may try to get filled ahead of or at the same time as the off-the-floor order. Brokers did various things to counter this. Naturally the original bidder didn't like the fact that other traders could lean off his bid. This is eliminated with electronic trading because the bids are filled in the order they arrive. There is no running to the front.

However with penny trading and even fractional penny trading, running paper is re-introduced into the system. Why would someone with 5,000 shares to buy submit an order knowing some jackass could step in front of him by .001 of a cent utilizing no special knowledge other than the fact that a bid exists. Why would the larger traders participate in such a system? Sure the spreads are narrower, which the promoters of decimilization trumpet, but there's less depth. A lack of depth is just as costly as wide spreads. The two go together. Razor narrow spreads without depth is not helping anyone.