Minimum Price Improvement Standards

What this video covers

• What minimum price improvement standards actually answer: how far a proprietary trade must improve on a held customer limit order, not when the member may trade
• How the customer limit order's price selects the correct branch, instead of looking at the security's current trading price
• Why orders priced at $1.00 or more require a flat $0.01 improvement for NMS stocks, but the lesser of $0.01 or one-half of the current inside spread for OTC equity securities
• How every band below $1.00 uses a named increment as a ceiling and applies the lesser-of test against one-half of the current inside spread
• How the zeros pattern works for orders priced below one cent, including the $0.001, $0.0001, $0.00001, and $0.000001 ceilings
• How to calculate an unpublished inside spread by contacting at least two unaffiliated dealers, using the highest bid and lowest offer, and documenting the dealers and quotations received
• How the either-or route for orders outside the best inside market works, and why protecting one pending order also protects better-priced customer limit orders