The Securities and Exchange Commission on Wednesday approved a change to market rules that would cause the prices of many stocks to be quoted in increments of $0.005.
The rule change—which could potentially affect thousands of stocks and exchange-traded funds—is part of an overhaul of market plumbing that SEC Chair Gary Gensler initiated after the GameStop trading frenzy of early 2021. It was approved in a unanimous vote by the agency’s five commissioners, including two Republicans who have in the past opposed elements of Gensler’s agenda.
SEC officials say the rule change will help lower costs for investors by narrowing bid-ask spreads—the difference between the buying and selling prices of stocks. Bid-ask spreads eat into investors’ gains when they trade in and out of stocks. If the spreads are tighter, investors save money.< - >
https://www.wsj.com/finance/regulation/get-ready-to-see-stock-prices-in-half-pennies-1f18321b?mod=hp_lead_pos11IMO the only 'investors' served by this are the high-speed traders moving millions of shares and trying to profit on miniscule amounts per trade, and *maybe* fund managers might save a tiny amount on commissions as they reposition. But the Average Joe and Jane Investor won't care one bit....or notice an extra $1 in their fund's share price at the end of the year thanks to such cost savings.
Comments
Thanks for the news post.
I have been asking for this change for a while, without knowing it was in the works. I may have even posted in this forum about the penny bid-ask spreads, thus, robbing the peasants like us to give it to the institutional investors.
Institutional investors already had access to sub penny bid-ask spreads. You can see it from the fill price of some of your orders.