'Mr. Nickel' and allies keep plugging 5-cent fix for stock market
Source: Yahoo Finance
For several years, a few market veterans have carried on a wistful, even quixotic, campaign to recover a lower-tech, higher-touch version of stock trading, by reverting to swapping shares in five-cent increments instead of pennies.
Recently, the idea of at least experimenting with nickel-wide price gradations for some stocks has earned the support of more of the Wall Street establishment, ahead of a key vote on Friday by a committee that will make recommendations to the Securities and Exchange Commission on market-structure changes.
... The advent of decimalization of trading in 2001 and the increasingly high-speed, automated approach to trade execution has rendered the stock market largely an argument among machines over slices of pennies. With dozens of exchanges and other trading venues vying for order flow and opportunistic computer-propelled middlemen jockeying in microseconds for a fleeting advantage, the explicit costs of trading have plummeted.
But the secondary cost to “real money” institutional traders, such as mutual funds, from the lack of displayed buying and selling interest and illiquid behavior in many smaller stocks has remained frustratingly high. Big funds fear front-running by systems built to detect large orders and step ahead of them electronically for a penny or less.
Read more: http://finance.yahoo.com/blogs/michael-santoli/wall-street-execs-plug-nickels-as-a-stock-trading-fix-165415354.html