Decimalization .01, .02 Message Board

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Pastimes : Decimalization .01, .02

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To: Sr K who wrote (1)	8/6/2000 8:31:35 AM
From: LPS5	Read Replies (1) of 7

Are there issues we need to be concerned about, such as front-running (by a penny) or multiple commissions for penny differences in transaction prices? Well, first, bidding over or offering under, whether by a penny or 1/16 has nothing to do with frontrunning. Nothing whatsoever. Frontrunning deals with professional traders' usage of block order information to position themselves advantageously. Second, most brokerage firms bundle together all transactions on one side in one issue that occur within three minutes, so there's little reason - at least for me - to believe that firms will start charging for partial fills just because they're occuring on a decimal, rather than fractional, basis. Is it a net positive for the ECN's and negative for the exchanges - because with many more differently priced bids and offers (similar to the 9:30 delayed openings) it will slow transactions, unless it is automated? Specifically with regard to volume: I suspect this is among the reasons why NASDAQ is now looking into systems which will enable them, like the exchanges, to do a single price opening via an automated system. LPS5

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