Jon Normile said:
Here is an example. If a stock, ABCD, is 15 ¬ by 15 « and a Datek Online customer
enters a buy order priced at 15 17/32, the bid price of ABCD will not change.
However, if another customer whose orders have access to Island, such as a Datek
Online customer, places a marketable order to sell, his/her order will be matched
off against the best available bid at 15 17/32. In this case, Island offered a
better price than NASDAQ is able to display.
The customer's buy price of 15 17/32 is 1/32 greater than the ask price of 15 1/2 and thus is marketable and should be immediately executed at the ask of 15 1/2. Perhaps he meant to enter a price of 15 9/32, which is 1/32 over the bid of 15 1/4. Hopefully, he might have spotted his error on the confirmation page; if he was using orders7 he would have been S.O.L.
This is a good argument for decimalization; until that day comes, how about Datek offering an option to display prices Treasury-bond style, i.e., 15 1/4 as 15:08 and 15 1/2 as 15:16 ?
Also, to everyone: please avoid special characters such as ¬ and « in your posts; I had to fiddle with the font in my browser to get these to display properly. Please confine your posts to using standard ASCII, such as 1/4 and 1/2. |
