Buy/Sell price graduations

[Gryffyn]

I'm pretty sure Access only allow fractions of a cent for shares trading below a certian price. If so, has any one given any thought to the fact that shares that trade just over/around that point must by definition be constrained to move upward in bigger leaps than they are constrained to fall.

Is the fraction of a cent rule an exchange wide thing or broker by broker?

[Futurz]

quote:Originally posted by Gryffyn

I'm pretty sure Access only allow fractions of a cent for shares trading below a certian price. If so, has any one given any thought to the fact that shares that trade just over/around that point must by definition be constrained to move upward in bigger leaps than they are constrained to fall.

Is the fraction of a cent rule an exchange wide thing or broker by broker?


I believe it is an exchange thing not a broker thing. Any share trading under 20 cents can be done so in 0.1 cent increments. There are exceptions like warrants and certain shares like WIN and OZY.

[Gryffyn]

Cheers - so it reinforces the fact that beyond that point the minimum size of rises must be greater than the minimum size of falls.

[Sid]

You would think that now everything is traded via a computer system, all shares could trade in 0.1 cent increments. This would be especially beneficial to illiquid stocks, and also stocks hovering just at or above 20 cents (A 1 cent spread here equals 5%). I can't work out why the NZX haven't introduced this since they have a vested interest in anything that might increase turnover.

[Ricardo]

On the NZAX Rocom trades in 2 cent increments (does anyone know if all NZAX stocks the same?)
If you try and place a limit order 1 cent away from current price its not accepted.
In this case the maths is reversed to Gryffyn's original conclusion. As the price falls the % moves get very significant. 20 cents to 18 costs you 10% of your investment, but once price is down to 10 cents if it went down another 2 cents that would be 20% gone.
I sometimes wonder if this contributes to the shocking liquidity in this market. Volatility is what traders need (although a nice long bullish phase wont see me complain) but without liquidity trading is impossible.

[Steve]

I believe NZAX moves in 2c increments.

[whiteheron]

Trades on NZX up to 20 cents can be in increments of .1 of a cent
Over 20 cents can only be in increments of 1 cent

This is obviously ridiculous for shares trading in the region of around 20 to 30 cents where prices can only move in increments/decrements of around 3% to5% and I propose to take this up with NZX

I suggest that the ASX has a much better increment system
Up to 10 cents in increments of .1 of a cent
10 cents to 50 cents in increments of .5 of a cent
Over 50 cents in increments of 1 cent

I would like to see something like
Up to 50 cents increments of .1 of a cent
50 cents to $1 increments of .2 of a cent
$1 to $2 increments of .5 of a cent
Over $2 increments of 1 cent

With computerisation i see no problem in making changes to something like the above suggestions

Comment from others will be welcome