Why are some stocks minimum tick size 0.05

[traider]

Hi,

for example a stock like CCC
bid ask spread is always min tick size of $0.05. Is there a way to avoid this?
Why do I send market order and get filled at $0.0025 intervals?

Thanks!

 

[Robert Morse]

https://www.nyse.com/tick-pilot

 

[Tim Smith]

Why do I send market order and get filled at $0.0025 intervals?

You can thank the waste of space, good-for-nothing, vulture companies known as algo funds (or HFTs).

Eric Scott Hunsader from NANEX is the recognised authority on the subject of dodgy goings on in the market and he has written on the topic of sub-penny fills here : http://www.nanex.net/aqck2/3519.html

 

[Shadetree42]

You can try sending pegged-to-midpoint orders using Island or IEX.

 

[traider]

I'm still curious why min tick size is not 0.01, then the market makers converge on the natural bid ask spread. Rather it seems this is mandated by exchange or something...

 

[Tim Smith]

I'm still curious why min tick size is not 0.01, then the market makers converge on the natural bid ask spread.

I'm not sure you understand what I posted above.

Yes, there is a minimum tick size / increment, and in a simplified manner, what you describe is the "theory".

The problem is what Eric Scott Hunsader/NANEX write about. Internalizers and those disgusting people known as HFTs.

The internalizers and HFTs are the reasons why you see fills to a million decimal places !!! Those extra decimal places are artificial bullshit.