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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.
Trade Volume Explodes as Retail Traders Make Their Mark
- NetworkNewsWire Editorial Coverage
NEW YORK, Jan. 28, 2021 /PRNewswire/ Only three weeks into the new year, and stock trading volumes are through the roof, reports a Jan. 22 CNBC article , titled Trading Volume Is Up from 2020 S Breakneck Pace as Retail Investors Jump In. The article continues: It s not just equity prices that are hitting new highs in 2021. Trading volumes for stocks and options are at records as well. Much of it is being driven by retail investors, who are continuing the high level of engagement that began in 2020. January volumes are up 92% from last year and up 33% just since December. Evidence points to increased retail trading as the primary impetus in the record-setting increase in volume with much of the real volume increase coming from little-known names in the small cap market. Electronic brokers are hitting new highs as investment markets become more retail driven, and independent investors