Re: [RT] Minimum price increment

["Ira" <mr.ira@xxxxxxxxxxxxx>]

The minimum bid is for market makers standing in 
the crowd and has nothing to do with you, other then the increments of bid and 
offer.  There is also a maximum spread between bid and offer that can be 
made in the crowd.  If the bid is $3 then the minimum offer in the crowd, 
by a market maker is $3 and $3.10.  That doesn't stop you from putting in 
an offer or bid at $3.00 or $3.10. If you put in your offer at $3.10 you 
are competing with market makers and floor brokers that are holding 
offers.  It used to be, that if you tell your broker that you want your 
offer in the book, that book orders were filled before floor orders and they 
were filled in the order booked.  What if the bid/offer in the crowd was 
$3.00 at $3.50?  You can put a bid or offer anywhere in the middle in $.10 
increments.  Whether you would get filled or not is another matter, but if 
your offer was at $3.30 it could read $3.00 at $3.30 or a market maker could 
rest upon your offer and offer at $3.20 knowing that your offer was there if the 
price of the underlying starts to rise.  When you cancel your offer the 
market might very well go back to $3.00 at $3.50.  Your offer was the 
market makers stop loss. 
<BLOCKQUOTE 
>
  ----- Original Message ----- 
  <DIV 
  >From: 
  Brendan 
  B. Boerner 
  To: <A title=realtraders@xxxxxxxxxxxxxxx 
  href="">realtraders@xxxxxxxxxxxxxxx 
  
  Sent: Thursday, June 12, 2003 6:36 
  AM
  Subject: RE: [RT] Minimum price 
  increment
  
  <FONT face="Bookman Old Style" 
  color=#0000ff size=2>Thanks Dan.
  <FONT face="Bookman Old Style" 
  color=#0000ff size=2> 
  <FONT face="Bookman Old Style" 
  color=#0000ff size=2>Do you know how the minimum tick works for an option 
  which is trading @ $3.00 +/- 0.xx?
  <FONT face="Bookman Old Style" 
  color=#0000ff size=2> 
  <FONT face="Bookman Old Style" 
  color=#0000ff size=2>Does is become $0.05 when the last trade was < $3.00 
  and $0.10 when the last trade
  <FONT face="Bookman Old Style" 
  color=#0000ff size=2>was $3.00 and up?
  <FONT face="Bookman Old Style" 
  color=#0000ff size=2> 
  <FONT face="Bookman Old Style" 
  color=#0000ff size=2>How is min tick enforced?  Will a broker not accept 
  an invalid bid/offer if the bid / off
  <FONT face="Bookman Old Style" 
  color=#0000ff size=2>doesn't honor the min tick 
  requirement?
  <FONT face="Bookman Old Style" 
  color=#0000ff size=2> 
  <FONT face="Bookman Old Style" 
  color=#0000ff size=2>Regards,
  <FONT face="Bookman Old Style" 
  color=#0000ff size=2>Brendan
  <BLOCKQUOTE 
  >
    <FONT face=Tahoma 
    size=2>-----Original Message-----From: Dan Goncharoff 
    [mailto:TheGonch@xxxxxxxxxxx]Sent: Wednesday, June 11, 2003 9:51 
    PMTo: realtraders@xxxxxxxxxxxxxxxSubject: Re: [RT] 
    Minimum price incrementfrom <A 
    class=moz-txt-link-rfc2396E 
    href=""><http://www.cboe.com/OptProd/EquityOptions.asp>:Premium 
    Quotation:Stated in points and fractions. One point equals $100. 
    Minimum tick for options trading below 3 is .05 and for all other series, 
    .10.RegardsDanGBrendan B. Boerner wrote:
    <BLOCKQUOTE cite="" 
    type="cite">Hello,

It's my understanding that for options below a certain amount ($3,
$5?)  that they trade in price increments of $0.05 and above that the
minimum price increment is $0.10.

I searched www.cboe.com and www.optionsclearing.com using keywords
such as "minimum price improvement increment" and didn't find the
details of these rules.

Can anyone point me in the right direction to find this info?

Thanks!
Brendan
To 
  unsubscribe from this group, send an email 
  to:realtraders-unsubscribe@xxxxxxxxxxxxxxxYour 
  use of Yahoo! Groups is subject to the <A 
  href="">Yahoo! Terms of Service. 







Yahoo! Groups Sponsor












To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxxxxxx





Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.