medium · Market Microstructure mmf-core
A trader attempts to submit a limit buy order for 500 shares of a stock currently trading at $0.8540 with a proposed price of $0.8541.
According to the Reg NMS Sub-Penny Rule (Rule 612), how should the trading venue handle this order?
- The order is permitted because the stock price is below $1.00, allowing for increments as small as $0.0001.
- The order is permitted only if the increment is at least $0.001, making $0.8541 invalid.
- The order must be rejected because it violates the minimum 0.01 tick size applicable to all NMS securities.
- The order is permitted only if the venue is a dark pool, as lit exchanges are restricted to $0.01 increments regardless of price.
Sign up free to see the explanation and track your rank →
More Market Microstructure mmf-core practice
- A stock is trading at $100.00. The Level 1 S&P 500 Market-Wi… — What is the status of trad
- If the stock gaps down and opens at $69.50 on Tuesday morning, at what price will the trad
- Using the Lee-Ready algorithm, how should a trade occurring at $50.10 following a $50.00 t
- During the pre-open period of an opening auction, the exchan… — What is the primary purpos
- If a stock enters a 'limit state' and does not recover within 15 seconds, what is the regu
- A retail trader hears a stock tip on a popular social media… — How is this trader classifi
- A corn farmer is worried that prices will drop before the harvest in three months. The far
- What is the clearing price that maximizes volume?