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<FONT face="Bookman Old Style" color=#0000ff
size=2>Ira, thanks for the
explanation.
<FONT face="Bookman Old Style"
color=#0000ff size=2>
<FONT face="Bookman Old Style"
color=#0000ff size=2>I'm asking because I'm developing a system to remain on the
inside bid / offer. I want to ensure that if I raise / lower the bid /
offer that I do so in such a way the honors the minm price increment
rules.
<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: Ira
[mailto:mr.ira@xxxxxxxxxxxxx]Sent: Thursday, June 12, 2003 9:10
AMTo: realtraders@xxxxxxxxxxxxxxxSubject: Re: [RT]
Minimum price increment
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.
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