Thomson Reuters Matching includes platform controls that can influence trading behaviour, including Minimum Quote Life that ensures longevity of orders in the book and gives counterparties a fair chance of trading those orders, and Minimum Tick
Size that helps achieve the right balance between tight spreads and stability of prices.
In 2005 the Hong Kong Stock Exchange (HKEx) reduced the minimum tick
sizes for shares priced over HK$30.
The Tokyo Stock Exchange (TSE) is to reduce the minimum tick
size for single stock options in Q4 2011 from 0.5 to 0.1 yen.
Right now, stocks are quoted on exchanges in one-cent increments, after regulators reduced the minimum tick
size from an eighth of a dollar in 2001.
Some of the differences between NYSE/Amex and Nasdaq trading relate to the minimum tick
size on each market, and to chronological changes in the minimum tick
(2) With imperfect liquidity, the size of the price revision following a trade is likely positively related to tick size, since any adjustment to prices must be at least as large as the minimum tick
. Likewise, the price impact should be negatively related to market depth, since lower depth implies that a given (large) trade may have to travel through more prices in order to be filled.
These results survive extensive partitioning of the data and differ in spirit from those reported ar ound the transition of the minimum tick
size from eighths to sixteenths.
The EC's consultation document proposed giving ESMA authority to: enforce technical standards on minimum tick
sizes and circuit breakers; consult with market participants and national regulators on pre-trade transparency waivers; set the fees charged by trading venues for post-trade data and; oversee the potential obligations for high-frequency traders -- such as minimum quoting periods or order-to-cancel ratios.
They are identical in terms of their notional value, minimum tick
size, contract critical dates, and coupon.
Stocks and other financial assets are traded at prices that lie on a fixed grid determined by the minimum tick
size permitted in the market.