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Traders Magazine
By Phil Mackintosh, Chief Economist, Nasdaq
We’ve talked before about how odd lots are increasing and often provide the best quote in stocks. It was the basis for our own proposals on intelligent ticks as well as some of the SEC’s new NMS II rules last year.
It’s mostly the Securities Information Processors (SIPs) that discern between round and odd lots, only including round lot
quotes into the public NBBO. Although, since December 2013, the SIPs have reported all odd lot
. Exchange matching engines usually don’t treat odd lots any differently. Queue priority is unaffected, and odd lots will fill on a spread crossing order, even if that incoming order is a round lot, often giving those incoming orders price improvement.
Technology 45 mins ago
But several signs are pointing to institutional investors as big drivers of the wild price action on the way up. Although retail buying was portrayed as the main driver of the extreme price rally experienced by some stocks, the actual picture may be much more nuanced, JPMorgan global quantitative and derivatives strategy analyst Peng Cheng told clients in a note. JPMorgan s quant team uses public data from exchanges and applies a proprietary methodology to identify which flows are from retail traders. GameStop was number 15 on the firm s retail buying list for January.
The rookie investor vigilantes grabbed the most attention by being all over social media, posting screenshots of their positions and crucifying Robinhood and other brokers when the firms were forced to limit trading in the high-flying names. The membership of Reddit group WallStreetBets has rocketed to 8.5 million subscribers.