easy · Market Microstructure
A stock is priced at $1.05. A market participant submits a quote with a price of $1.0505.
Why is this quote rejected under Rule 612 of Reg NMS?
- Because only market makers may submit quotes in sub-penny increments.
- Because for stocks priced at or above $1.00, the minimum price increment is $0.01.
- Because the quote is not at least 1% away in price from the last reported trade.
- Because the minimum increment must be at least $0.001 for all NMS stocks regardless of price.
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