Note from the Publisher: Technically speaking, we hope the SEC does not ACTUALLY have ticks, but we ARE excited to hear that they are rollng out their new Tick Pilot program. They’re looking to see if allowing smaller company stocks to be traded at tick levels higher than a penny will incent broker-dealers to trade more volume in these issues. Our CEO has been trading in institutional markets for several decades, and has long been against the lower tick levels. We are sure many traders in the markets will find this a favorable scenario, as does he.
“Wall Street brokers are getting ready to comply with the latest pilot program from the U.S. Securities and Exchange Commission.
The equity market is about to embark upon a two-year program to evaluate the possible benefits or hazards in trading different securities in different tick sizes. The so-called Tick Pilot program is targeted at smaller-company stocks that are using harder to trade at the current penny increment that most stocks trade at. The idea behind the pilot is to incentivize broker-dealers to make markets in smaller stocks, and to encourage the brokers to provide research in these less liquid stocks.
‘This is finally going to address the notion that one tick size does not fit all,’ said James Angel, associate professor at the McDonough School of business at Georgetown University told Markets Media. ‘Having one tick size for all stocks is like charging the same price for different cars. It just doesn’t work.'”