ASX $500 minimum order size - how does it work?

[markies21]

The minimum order size for the first trade in a company listed on the ASX is $500.

How does the minimum trade size of $500 get enforced when a partial fill is received and the order is subsequently canceled (ie because the trading day ends)?

Does the order get bounced (reversed) or is it submitted at market by your broker in order to fill the $500 minimum trade size requirement? Or, is it possible to purchase less than $500 worth of shares with a partial fill, so long as your order is greater than the $500 minimum?

 

[Drac0]

Where did you get this $500 minimum? As far as I'm aware the minimum purchase is 1 share and has been that way for about 15 years. Your broker may set a minimum limit, but not the ASX.

Mind you, I wouldn't consider trading that low anyway, the brokerage would kill you.

Someone please correct me if I'm wrong...

 

[markies21]

Where did you get this $500 minimum? As far as I'm aware the minimum purchase is 1 share and has been that way for about 15 years. Your broker may set a minimum limit, but not the ASX.

Mind you, I wouldn't consider trading that low anyway, the brokerage would kill you.

Someone please correct me if I'm wrong...

The $500 minimum is documented here Australian Securities Exchange - Wikipedia, the free encyclopedia under Marketable Parcel but is also listed on your brokers website (ie Commsec, eTrade etc).

So back to my original question:

How does the minimum trade size of $500 get enforced when a partial fill is received and the order is subsequently canceled (ie because the trading day ends)?

Does the order get bounced (reversed) or is it submitted at market by your broker in order to fill the $500 minimum trade size requirement? Or, is it possible to purchase less than $500 worth of shares with a partial fill, so long as your order is greater than the $500 minimum?

 

[Drac0]

I'll take your word for it, even though there is no mention of this 'minimum' on the ASX website (or working links from elsewhere referencing the ASX site) except in reference to Exchange Traded Funds (ETF's). I suupose it's buried in there somewhere but it's not something I've ever worried about.

 

[Joules MM1]

Australian Securities Exchange - Wikipedia, the free encyclopedia

The first time a trader purchases stock in a particular security, they must trade a minimum amount of shares called a marketable parcel. Currently a marketable parcel is defined as at least $500 worth of the stock in question. The marketable parcel restriction only applies to the first trade in any particular stock.

"...only applies to the first trade in any particular stock..." and this is set by the asx which is a governance, not a guideline, over online brokers too

all unfilled orders should remain active until filled, for 22 trading days, unless you specified that the order is a day order (that is, the order is only active that day)

comsec only accepts (the asx) marketable parcel if you do not already have ownership of that stock, otherwise there is no floor limit on future purchases/sales

131519 comsec

 

[Drac0]

Australian Securities Exchange - Wikipedia, the free encyclopedia


"...only applies to the first trade in any particular stock..." and this is set by the asx which is a governance, not a guideline, over online brokers too

Can find plenty of places quoting this type of thing but nothing from the ASX itself. Not saying it isn't true, but would be nice if it was somewhere on the official website...

all unfilled orders should remain active until filled, for 22 trading days, unless you specified that the order is a day order (that is, the order is only active that day)

comsec only accepts (the asx) marketable parcel if you do not already have ownership of that stock, otherwise there is no floor limit on future purchases/sales

131519 comsec

But that still comes back to the original question. If you place the initial purchase order and it expires (22 days or as day order?) and it's only partially filled, what happens? You haven't met the requirement of a $500 initial purchase so what do they do?

Got me interested now

Cheers.

 

[markies21]

Exactly, the question is still unanswered. Can someone please answer the question?

No trolling please.

 

[markies21]

"...only applies to the first trade in any particular stock..." and this is set by the asx which is a governance, not a guideline, over online brokers too

So:
- governance = enforced
- guideline = not enforced

How is it enforced?

 

[Joules MM1]

your min first buy is $500.....regardless of how long the order is active, if you get a partial fill, the balance remains active until that exe period is over......if you get filled for whatever amount the balance, not filled, is cancelled.....you get charged the usual fee regardless of fill.....pick up the phone operators are awaiting your call with a free set of

 

[markies21]

I've been chasing ASX and Commsec, this is what I've got so far from them...

- From the ASX, there is nothing in the ITS (Integrated Trading System) that would force partial fills to become full fills, and they will not forcefully reverse a trade if it is <$500 because of a partial fill (good).
- From CommSec, if your initial trade is partially filled, you will end up with a non-marketable parcel of shares, which they say a company has a right to purchase back at any time.

I asked CommSec if the company must give you the chance to opt-out of any share buy-back for non-marketable parcels (small shareholdings), but they said it is up to the Share Registry. So the question is back with the ASX!!

 

[markies21]

Mind you, I wouldn't consider trading that low anyway, the brokerage would kill you.

True, if you're trading I would not recommend buying $500 worth of shares.

But, there is *some* advantage in very small holdings. If you're an Australian or New Zealand resident, you can take advantage of retail Share Purchase Plans. For the cost of the share(s) and brokerage, you get a free European Call Option on up to $15,000 AUD of shares (albeit with delayed settlement).

 

[Drac0]

I've been chasing ASX and Commsec, this is what I've got so far from them...

- From the ASX, there is nothing in the ITS (Integrated Trading System) that would force partial fills to become full fills, and they will not forcefully reverse a trade if it is <$500 because of a partial fill (good).
- From CommSec, if your initial trade is partially filled, you will end up with a non-marketable parcel of shares, which they say a company has a right to purchase back at any time.

I asked CommSec if the company must give you the chance to opt-out of any share buy-back for non-marketable parcels (small shareholdings), but they said it is up to the Share Registry. So the question is back with the ASX!!

I've been chasing the ASX as well, they must be wondering what's going on with this subject. My result on a query about partial fills was:

In respect of your query, you will need to liaise further with your broker. There is currently no configuration within our Integrated Trading System (ITS) that prescribes how orders will be filled throughout the day. Each broker may have different parameters, for example, the length of time that a particular order can stay in the market partially filled may differ between brokerage firms.

So they trow it back to the broker......

This could go in circles forever. :whistling

 

[Joules MM1]

I've been chasing the ASX as well, they must be wondering what's going on with this subject. My result on a query about partial fills was:

So they trow it back to the broker......

This could go in circles forever. :whistling

are you asking for educational purposes?

if you take a $500 stake and the stock does not move, you are already seeing a 12% draw-down on trade cost (not allowing for taxation) so, even if you get a partial fill and the registry does not cancel on you, then, the benefit is a long way away

 

[Drac0]

are you asking for educational purposes?

For me it's out of pure interest. I never even realized there was a minimum limit (now confirmed by the ASX), but it would be interesting to know what happens if the minimum can't be met. Apparently nothing.... :cheesy:

Definitely not the best way to make a profit though, trading this minimum.

I don't know what the original posters interest in this is.

 

[markies21]

Look up Stephen mayne in google.

Trying to see how much a similar portfolio would cost...

 

[Joules MM1]

Look up Stephen mayne in google.

Trying to see how much a similar portfolio would cost...

to quote Nick Radge, thechartist.com.au "....you wanna be right or do you wanna make money?"

 

[Martin Gifford]

1. CMC allowed me to cancel a partially filled order straight away.

2. Orders below $500 make sense if you want to bet on company options that you think could fly high. Since they could go to zero, you don't want to risk much money on them.