Nasdaq Change to Limit Orders ?

Trader333

Trader333

Moderator
Messages
8,753
Likes
1,026
I notice that today I am unable to place limit orders to 3 decimal places (which is something I do a lot of). For example if a stock is trading at Bid = $26.50 and Ask = $26.51
then I may want to place a limit order to go Long at $26.501 which never used to be a problem but it appears I am not able to do this any more.

Does anyone have any information on this ?


Paul
 
Apparantly there is a new Island tick rule. Island no longer supports trades under or above a round penny for stocks valued over $1 and was implemented by Island on February 27th but is now in force by most brokers.

This is not good news for the purposes of getting into the market at the best point and most definitely takes away an edge that could be used by the more astute traders. Over time this could add significant costs to trading Nasdaq stocks in my view.

Time for a strategy review I think.


Paul
 
I guess they're trying to stop all the "chippies" leapfrogging ahead of the big boys ! Nice hey, they just change the rules when it suits !

rog1111
 
I think you can still shave on Brut :?:

But don't quote me as they say ...Not really my domain anymore :cheesy:

CJ
 
It does say they wil be monitoring the situation, but given they have already carried out their pilot (last year) and found it beneficial (!) I imagine it's unlikely it will be reviewed in the short term.

As they're auto rounding down sub-penny bids and rounding up sub-penny asks there shouldn't be any unexpected exposure from automated trading systems already in place. However, as Paul says, it may be a good time to rethink strategies.
 
Dumb Question???

If it's only ISLD (Inet) that have adopted this rule, is there anything to stop you selecting (preferencing?) another ECN/MM or have they all adopted this rule?
 
Thanks for the link a320. The SEC refer to orders that are "not transparent" to market participants, but whose side are they on ? We find a bit of an edge, and they close it down, and then come up with all these marvellous reasons why. Who is pulling who's strings here ? Need I ask.....nice ! :devilish: Bitter, me ?!

rog1111
 
Hmm..No shaving & no bullets... :confused:

Does take the edge of things... know doubt more will move onto the furtures markets :?:

CJ
 
Futures and FX not impacted then?

Trying very hard to specialise in dumb questions today so how about...

Is there a LII equivalent (or is it the same LII) for FX and Futures?
 
a320 said:
Hmm..No shaving & no bullets... :confused:

Does take the edge of things... know doubt more will move onto the furtures markets :?:

CJ
Click to expand...

The spreads in SSFs are higher, so it might be the way to go. I'm not sure about the liquidity of these things, but they track the stocks very closely.
 
Bramble - people just use the order book in e-futures markets. Same concept, just that there is only one destination for execution - the host (exchange).

I used to think this was a great benefit of NASDAQ - multiple destinations ment greater competition between destinations for your order and fee they would receive.

When the SEC introduced the 25k day trading rule, all the minnows moved off to trade ES - which is why that market is such a mess imo. Too many kids trying to grab a tick or a point as they cant trade trends. This has caused the Futures traders to move out and attack the FX - the last bastion of truly free markets. Meanwhile, I've noticed NASADQ stocks getting less choppy each day, as better trends develop as the scalpers move out to ES. The cycle has almost complete itself!

I thought perhaps this was the motivation for this new rule - not that I agree with it.

I am against (most) regulation in the markets. Trading is the last real frontier of capitalism, and the free spirit. Thats why regulation sucks - even if it does sometimes create a more orderly market.

Thats my rant for the day - I'm going back to bed. Wake me up when the SEC know their ar$e from a hole in the ground.
 
It doesn't bother me at all.As the Nasdaq changes so does the styles in which to trade it evolve.

We all thought it was the end of the world when they got rid of fractions.

Many yearn for the $200+ stocks to come back to trade in a style that fitted that scenario.

I've already changed my style to fit the Nasdaq as it is now,so this rule means nothing to me.
 
Last edited:
The smaller retail traders will probably adapt well :cool:
Its the Proprietary boys this will hit hard..in my day shaving was one of their core methods used + trying to spoof.. :confused:

Trading Gaps..DT/DB's PreDayHL's, Century/Decade numbers, fibs, Opening price support,hooks,breakouts,Ax shadows ect ect...these will always be there.. just now people have to be a little more cunning to nail Bid/Ask :cool:
As Naz points out there will be ways around this..or you could join the real money on the CME :cheesy: (sorry couldn't resist..) :eek:

CJ
 
Last edited:
Naz has made a good point. Flexibility and adaptability is key in this job.
 
BBB said:
[ FX - the last bastion of truly free markets.
. [/B]
Click to expand...

Free un-manipulated markets :eek: now that would be something to think about :cheesy:


CJ
 
Last edited:
a320 - valid point. The manipulation is mostly done by governments, and large banks. The key is to use their manipulation to your advantage. (Easier said than done - sorry to state the obvious).

Back to the thread - does anyone think that this new shaving rule will lead to wider spreads - thus more intraday volatility? Could that be a good thing?
 
You must log in or register to reply here.

Similar threads

R
Limit orders
Replies
4
Views
3K
CharlesBakerfx
C
N
My limit orders placed in Interbank market
Replies
2
Views
2K
Nonameo
N
J
Placing Limit Orders
Replies
0
Views
1K
javadepro
J
O
Limit order execution
Replies
0
Views
1K
ogik
O
D
Limit orders on options with Interactive Brokers
Replies
2
Views
2K
dr_trick
D
Top