The U.S. Securities and Exchange Commission will vote Wednesday to change the minimum pricing increment for many large-cap stocks, likely to allow for pricing increments of a half-cent. The agencyQuote sizes have been coming down for a long timeSign up for NBC New York's News Headlines newsletter.
These reductions in tick size had a profound effect on the brokerage business: It made stock trading far less profitable, but it provided big savings to buyers and sellers of stocks. Reducing the tick size also improved market liquidity.As the volume of trading in the largest stocks has expanded, the trading community has debated about whether tick sizes should be reduced further.
Most in the trading industry feel the SEC will settle on a half-cent increment because trading in increments of one-tenth of a penny creates too many price points.